Oil and gas operators will need to keep looking for new reserves in order to keep up with global energy demand over the next two decades, but they may have a hard time bringing fields with higher production costs on stream, according to Rystad Energy.
In a statement dated December 11, the Norwegian consultancy asserted that existing fields with a break-even point of $60 per barrel or less held enough oil and gas to cover demand growth and compensate for declining output at mature sites only until 2027. If energy companies do not make a point of looking for new reserves, they will not be able to push that date back, it said.
This means that exploration work must continue, even if world energy demand peaks as early as the late 2020s, Rystad Energy said. It also suggested that oil and gas operators work to clear their portfolios of projects that are unsanctioned but commercially viable.
Audun Martinsen, the consultancy’s head of oilfield services research, commented: “This means that although we need to discover additional resources, only fields with breakeven prices below $60 [per barrel] Brent are likely to be commercial through 2030 and likely towards 2040. 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.”