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Global oil and gas discoveries fall to record low

1 May 2024

Global oil and gas discoveries last year fell to a record low, while the costs of oil and gas exploration almost doubled, according to the Annual Gas Market Report 2024 by the Doha, Qatar based Gas Exporting Countries Forum (GECF).

In 2023, the total volume of discovered gas and liquids amounted to 5 billion barrels of oil equivalent (boe). Of this, natural gas accounted for 40% (340 bcm), while oil constituted 60% (3 billion boe). This is compared to total discovered volume of 10.5 billion boe in 2022, with natural gas accounting for 640 bcm. This marked a more than 50% y-o-y reduction, with 2023 recording a new record low in terms of discovered volumes, Figure 1.

Figure 1. Global oil and gas volumes discovered vs exploration investment

* Data for 2024 is a forecast

The low discovered volumes in 2023 led to a significant rise in the marginal cost of finding for both natural gas and oil. The cost for natural gas rose from 2.6 $/boe in 2022 to 5.3 $/boe in 2023, while the marginal cost of finding oil increased from 3.5 $/boe in 2022 to 8.8 $/boe in 2023. This was driven by disappointing results in some key offshore exploratory wells.

Offshore discoveries continued to dominate with 74% of the total discovered volumes (3.7 billion boe), compared to 87% in 2022. Ultra deepwater prospects acquired the major stake in the offshore discoveries with 41%, followed by deepwater prospects that accounted for 30% of the offshore discoveries. This indicated the additional challenges that global exploration activity was facing, with high value prospects located in more challenging geographical locations resulting in additional cost impacts incurred to explore them compared to onshore or continental shelf exploration campaigns, GECF noted in the report.

The reserve replacement ratio for natural gas, Figure 2, witnessed a decline to 13% in 2023, down from 19% in 2022—mainly driven by the disappointing results of exploration. This means that the world’s natural gas consumption in 2023 was nearly eight times higher than new discoveries. Similar, disturbingly low RRR levels have been seen for crude oil.

Figure 2. Gas reserve replacement ratio (RRR)

The GECF Annual Gas Market Report provides global and regional data on natural gas production, consumption, trade, storage, and prices. Statistics on oil and gas exploration in the 2024 edition of the report are largely based on data by Rystad Energy.

Source: GECF Annual Gas Market Report