Offshore staff
LONDON — A new report by Wood Mackenzie, “Scraping the Barrel”, suggests that total discovered and prospective oil and gas resources are more than double the world’s projected demand in 2050.
However, "advantaged" resources, described as those with a low breakeven and with emissions sustainable in Scope 1 and 2 terms, are far from abundant.
Most developed fields have little to offer, the report added, while 28% of resources in commercial undeveloped fields, about 49 Bboe, are advantaged at a breakeven below $30 Brent, with an emissions intensity of less than 20 kgCO2e/boe.
“We see enough advantaged resources to satisfy only about half of our base-case oil and gas demand forecast to 2050,” said Andrew Latham, vice president, Energy Research for Wood Mackenzie Upstream.
Exploration could help locate further resources to increase this supply.
Wood Mackenzie calculates that the industry discovered 228 Bboe in new fields between 2012 and 2021, with an average emissions intensity of 16 kgCO2e/boe, against the current global average of 23 kgCO2e/boe (19 kgCO2e/boe for undeveloped fields) and at an average cost of supply in Brent price terms of $33/bbl.
Latham added, “We expect high-impact exploration to be an important source of new resource… Recent results suggest a contribution of around 5 Bboe to 10 Bboe of new advantaged barrels a year. Most will be found within energy super basins. Exploration on this scale over the next two decades will add oil and gas supply of around 10 MMboe/d to 15 MMboe/d by 2050.”
Latham concluded, “We are entering an interesting period in the upstream industry. Some companies will double down and hope for less competition in the sector. However, many may begin or accelerate their exit from the sector to pursue low-carbon energies and renewables. If this is the case, security of supply may become threatened, and unfortunately, we may see companies turning to disadvantaged resources to meet demand.”
02.16.2023
