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In the backdrop of rising output from unconventional fields, the share of total oil output globally had fallen 77 per cent in 2024 while in 2000, conventional oil fields contributed 97 per cent of total oil output globally.
According to IEA, nearly 90 per cent of annual upstream oil and gas investment since 2019 has been dedicated to offsetting production declines rather than to meet demand growth.
“Investment in 2025 is set to be around USD 570 billion, and if this persists, modest production growth could continue in the future. But a relatively small drop in upstream investment can mean the difference between oil and gas supply growth and static production. At the same time, less investment is required in a scenario in which demand contracts,” it added.
While in case of natural gas, around 70 per cent of the 4300 billion cubic metres (bcm) produced today is from conventional fields, with nearly all of the rest being shale gas produced in the United States.
Even with the shale revolution, overall oil and gas output still relies heavily on a small number of supergiant fields, largely in the Middle East, Eurasia and North America, which together accounted for almost half of global oil and gas production in 2024.
Alongside the observed rate declines that are derived from field production histories, it is possible to estimate the natural rate declines that would occur if all capital investment were to stop. These declines are even steeper. If all capital investment in existing sources of oil and gas production were to cease immediately, global oil production would fall by 8 per cent year on year on average over the next decade, or around 5.5 million barrels per day (mb/d) each year.
“This is equivalent to losing more than the annual output of Brazil and Norway each year. Natural gas production would fall by an average of 9 per cent, or 270 bcm, each year, equivalent to total natural gas production from the whole of Africa today,” it stated in the report.
Most unconventional sources of oil and gas production generally exhibit much faster decline rates than conventional types. If all investment in tight oil and shale gas production were to stop immediately, production would decline by more than 35 per cent within 12 months and by a further 15 per cent in the year thereafter.
