International Energy Agency Says Global Oil Production Running Dry Over Funding Gap

The International Energy Agency (IEA) has stressed a caller point, informing of broader vigor shortages arsenic spending connected caller and existing lipid and state projects suffers backing shortfalls.

In a study released this week titled ‘The Implications of Oil and Gas Field Decline Rates, ’ the bureau reported that, if each spending connected caller and existing projects stopped astatine the extremity of this year, lipid output would autumn to 42 cardinal barrels a time (mm b/d) by 2035 and to conscionable 15 cardinal b/d by 2050.

The study said that state output would driblet to 1.6 trillion m³/yr and 500bn m³/yr by 2050.

The IEA said that if each upstream concern were to halt now, planetary lipid output would autumn by 8pc/yr and state by 9pc/yr implicit the adjacent decade. This equates to yearly declines of 5.5mn b/d for lipid — equivalent to the combined accumulation of Brazil and Norway — and 270bn m³/yr for state — adjacent to Africa’s existent output — it said. In 2010, the bureau added that earthy diminution rates would person lone led to a autumn of 3.9 cardinal b/d successful lipid and 180bn m³/yr successful gas.

According to the IEA, declining output astatine lipid and state fields requires substantially higher upstream spending to support dependable output compared with erstwhile decades.

The Paris-based Agency estimates that astir $500bn/yr has been spent globally to offset earthy tract diminution since 2019, astir 90pc of full upstream investment. However, lone $360bn/yr would person been needed had diminution rates remained astatine the 1980s levels.

According to the IEA, planetary lipid output stood astatine 100mn b/d successful 2024, portion state output reached 4.3 trillion m³. The Agency says that humble accumulation maturation could proceed if upstream concern continues astatine 2025’s estimated $570bn.

The IEA identifies 3 cardinal drivers of higher diminution rates.

First, the satellite present relies much connected unconventional sources specified arsenic choky lipid and shale gas, peculiarly from the US, which diminution faster than accepted fields.

Second, accepted lipid proviso includes much earthy state liquids (NGLs) and a greater stock from offshore deepwater fields, which diminution faster than onshore fields. Offshore state fields besides relationship for a larger stock of planetary output and are harder to sustain.

Third, lipid output is astir 20pc higher than successful 2010, and state output is 30pc higher. This means declines contiguous are from a higher base, starring to greater yearly losses successful implicit terms.

The IEA said that adjacent with continued concern successful existing production, lipid output would inactive autumn to 51 cardinal b/d by 2050 and state to 2.3 trillion m³/yr.

To support 2024 output levels done to 2050, the satellite would request an further 47mn b/d of lipid and 2 trillion m³/yr of state from caller projects not yet approved, the IEA estimates — “potentially accompanied by decisions to bring online immoderate of today’s spare lipid accumulation capacity”.

Both concern needs and output requirements volition yet beryllium connected the trajectory of lipid and state request implicit the coming decades.

The IEA sees lipid request peaking successful 2029 astatine 105.5mn b/d. In contrast, Opec expects depletion to proceed rising to 122.9mn b/d by 2050, with nary highest successful sight.

The Organisation of Petroleum Exporting Countries (OPEC)  responded to the study by saying the IEA was contradicting its earlier work. “The IEA has not referenced however its ain advocacy of its Net Zero Emissions Scenario oregon its ain prognosis of highest lipid request person discouraged investments and contributed to uncertainty astir semipermanent lipid demand,” OPEC said.