IEA: Oil and Gas Investment Necessary to Maintain Current Output Levels Amid Accelerating Field Declines.

The International Energy Agency (IEA) says that to sustain current oil and gas production levels, the world must continue investing in the upstream sector. Annual investment of around $540 billion is needed through 2050, compared to an estimated $570 billion this year. The IEA previously stated that no new oil, coal, and gas projects were needed to reach net-zero emissions by mid-century.

The International Energy Agency (IEA) has released a report highlighting the accelerating decline rates in global oil and gas fields, underscoring the urgent need for continued investment in the upstream sector. According to the IEA, the natural rate of decline in output is increasing, primarily due to the reliance on shale and deep offshore resources. This trend means companies must step up their investment efforts to maintain current production levels.

The IEA's report, drawing on data from approximately 15,000 oil and gas fields worldwide, reveals that the average global decline rates for conventional oil output are 5.6% per year, while for conventional natural gas, it is 6.8% per year. Without sustained investment, the world could lose the equivalent of Brazil and Norway's combined oil production annually, with significant implications for energy markets and security Global oil and gas field decline rates are increasing, IEA says^[1].

Fatih Birol, Executive Director of the IEA, emphasizes that "only a small portion of upstream oil and gas investment is used to meet increases in demand while nearly 90% of upstream investment annually is dedicated to offsetting losses of supply at existing fields." The report also notes that by 2024, about 80% of global oil production and 90% of natural gas production will come from fields that have passed their peak in production Global oil and gas field decline rates are increasing, IEA says^[1].

The IEA's findings are particularly relevant given the ongoing debate around the future of oil, gas, and coal projects. Four years ago, the IEA suggested that no new projects in these sectors were needed to meet climate targets. However, the current report indicates that maintaining existing production levels requires substantial investment. The IEA estimates that annual investment of around $540 billion is needed through 2050 to sustain current production levels, compared to an estimated $570 billion this year Global oil and gas field decline rates are increasing, IEA says^[1].

Moreover, the report underscores the importance of technological advancements in the industry. For instance, Turkish Petroleum (TPAO) is advancing its Sakarya gas project in the Black Sea, collaborating with companies like Baker Hughes, Saipem, and Subsea7. These collaborations are crucial for deploying subsea production and intelligent completion systems, optimizing production in challenging geologies, and ensuring the project's success Phase 3 of Sakarya gas project advances with subsea systems and EPCI contracts^[2].

In conclusion, the IEA's report serves as a stark reminder of the challenges and investment needs in the upstream sector. As the world moves towards a more sustainable energy future, balancing the need for investment in existing fields with the transition to cleaner energy sources will be crucial.