By Seher Dareen
LONDON (Reuters) -The natural rate of decline in output from the world’s oil and gas fields is speeding up, owing to more reliance on shale and deep offshore resources, the International Energy Agency said on Tuesday. That means companies will need to step up the pace of investment just to keep output flat.
The report from the IEA, which advises industrialised countries, warns that without continued investment in existing fields, the world would lose the equivalent of Brazil and Norway’s combined oil production each year with implications for markets and energy security, the agency said in a statement.
“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,” IEA Executive Director Fatih Birol said in the statement.
“Decline rates are the elephant in the room for any discussion of investment needs in oil and gas, and our new analysis shows that they have accelerated in recent years.”
The IEA is under fire from U.S. President Donald Trump’s administration for a shift in recent years to focus on clean energy policy. Four years ago an IEA report said there should be no investment in new oil, gas and coal projects if the world was serious about meeting climate targets.
Drawing on production data from about 15,000 oil and gas fields around the world, the new IEA report said the average global rates for annual post-peak decline are 5.6% for conventional oil output and 6.8% for conventional natural gas.
A halt in upstream investment would cut oil supply by 5.5 million barrels per day each year, the IEA said, up from just under 4 million bpd in 2010. The 5.5 million bpd figure is roughly equal to Brazil’s and Norway’s output combined.
The decline for natural gas has risen to 270 billion cubic metres (bcm) per year from 180 bcm, it said.
As of 2024, about 80% of global oil production and 90% of natural gas production came from fields that had passed their peak in production, the report said.
(Reporting by Seher Dareen in London; Editing by Alex Lawler and Edmund Klamann)
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