The world is on track to run out of sufficient oil supplies to meet its needs through 2050, despite lower future demand due to the COVID-19 pandemic and the accelerating energy transition unless exploration speeds up significantly and capital expenditure of at least $3 trillion is put to the task, according to a Rystad Energy report.
To meet the global cumulative demand over the next 30 years, undeveloped and undiscovered resources totaling 313 billion bbl of oil need to be added to currently producing assets. Rystad Energy calculates that, to match this requirement, exploration programs will have to discover a worthy-to-develop resource of 139 billion new barrels of liquids by 2050, an impossible task if this decade’s low exploration activity levels persist, it said.
The target is high because not all existing discovered volumes are profitable to develop.
“In theory, the total undeveloped supply would amount to 248 billion bbl of oil between 2021 and 2050. However, when we dive deeper into these discoveries and look at their discovery decade and current status, we find that about 74 billion bbl are highly unlikely to materialize and need to be replaced by new discoveries,”said Palzor Shenga, senior upstream analyst at Rystad Energy.
