Oil discoveries are at a lower level than has been seen in fifty years. It should help with the demand/price levels that we have been seeing. It should be another factor in climbing back out of the rut we’ve been experiencing.
Explorers in 2015 discovered only about a tenth of the oil they have annually on average since 1960. Due to falling oil prices globally, oil companies have reduced their exploration budget for new oil fields to ridiculous levels. In 2015, only 2,700 million barrels were discovered, the lowest amount since 1947. It is a context that draws much attention since the US energy information management indicates that demand for crude will grow by 2026 to 105.3 million barrels per day.
In future years this fall in the investment of explorations of new deposits will be felt, by 2025 this effect of scarcity will be felt, producers will be able to replace a little more than one of every 20 barrels consumed this year. Global spending on exploration, from seismic surveys to actual drilling, has been cut to $ 40 billion this year, from about $ 100 billion in 2014.
The result is lower drilling, despite the fact that the market crash has reduced the cost of operations. There were 209 wells drilled through August this year, down 680 in 2015 and 1,167 in 2014.
This situation will naturally increase oil prices in the years to come, especially beyond 2025. Given current levels of industry-wide investment and declining rates in existing fields, a significant supply gap could open for 2040.
If demand won’t improve this reduction in supply could be just what we need. Click here to read more: