OSLO, Norway – There are sufficient oil field discoveries with a breakeven oil price of below $60 Brent to meet global demand growth until around 2027, according to consultant Rystad Energy.
Beyond that point, however, additional volumes will be needed from yet-to-be discovered fields to satisfy total liquids demand.
That means global exploration efforts must continue, while at the same time, operators will need to work on their remaining but unsanctioned commercial discoveries over the coming years.
Only fields with breakeven prices below $60 Brent are likely to be commercial through 2030 or toward 2040, claimed Audun Martinsen, head of oilfield services research at Rystad.
“If the global E&P industry were to fail to discover sufficient resources at such breakeven prices, global demand would need to be satisfied by utilizing otherwise uncommercial fields, or transition more quickly to a different power mix.”
This year, according to the consultant’s estimate, around $200 billion has been approved for new oil and gas projects, and the sum looks set to climb to $225 billion next year, mainly driven by gas projects.
Offshore project sanctioning is set to exceed $100 billion in 2020.
However, while most of the offshore projects sanctioned this year had breakeven prices of less than $40/bbl, there could be a breakeven risk between 2020 and 2023. This is because close to 7% of the projects identified may incur a breakeven above $60/bbl.