Global Oil and Gas Discoveries Fell to a Record Low in 2023

Oil and gas discoveries last year fell to a record low of 5 billion barrels of oil equivalent while exploration costs rose close to twofold.

This is according to the Gas Exporting Countries Forum, which also said, as quoted by the Anadolu Agency, that 60% of the 5-billion-barrel total was new oil discoveries and the remaining was gas discoveries.

This total compared with new discoveries of 10.5 billion barrels of oil equivalent the previous year, the report noted, in support of arguments from OPEC that the industry is not investing enough in new oil and gas supply despite rising demand. OPEC has blamed the trend on investment discouragement from pro-transition forecasters and governments.

The cost problem also played a part in the lower investment rate, most likely. The GECF reported that the exploration cost per barrel of oil equivalent rose last year to $5.30 for natural gas, from $2.60 for the previous year.

For oil, exploration costs also rose considerably, from $3.50 per barrel of oil equivalent in 2022 to as much as $8.80 per barrel, according to the GECF. This could be because of the areas where most new discoveries are taking place—in deepwater offshore blocks.

According to the GECF, 41% of new discoveries last year were made in ultra-deep waters and another 30% were made in deepwater sectors.

As for geographical distribution, the biggest portion of new discoveries in 2023 were made in Asia, at 32%, with Latin America second, accounting for 21% of all new oil and gas discoveries. Europe and Africa were tied for the third place, with a share of 11% each.

The higher exploration costs and the challenges in finding new oil and gas may further serve to discourage investment growth in the sector, deepening a concern expressed on a now regular basis by OPEC, of a looming structural deficit on oil markets while oil demand remains very much on a growth path.