Oil discovery has decreased to its lowest amount since 1952, sparking fears about the future of the industry on a global spectrum.
The investment in oil and gas projects has dipped from $780 billion to $450 billion in the last two years. The road to recovery is now, as a result, looking even more prolonged than initially predicted after this new revelation.
The International Energy Agency has announced that wells are currently depleting at an average rate of 9pc year-on-year. Drillers are finding it difficult to establish enough oil to replace these barrels, which in turn is sparking huge fears about global energy security.
“There is evidence that cuts in exploration activities have already resulted in a dramatic decline in new oil discoveries, dropping to levels not seen in the last 60 years,” said the IEA’s World Energy Investment 2016 report.
There are many factors that have contribute to the lack of investment, including the UK’s North Sea investment, which has decreased from $8 billion to $1 billion over the course of the last five years. Canada has also experienced a sudden plummet of spending.
“With the price of oil at current levels, one would expect supply to contract and demand to grow strongly. However, the opposite now seems to be happening,” said the IEA.
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