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Declines in output from existing oil and gas fields gather speed
24/9/2025
News
Without continued investment in existing oil and gas fields, global oil production would fall by around 5.5mn b/d each year – equivalent to losing more than the annual output of Brazil and Norway each year, says a new report from the International Energy Agency (IEA).
The average rate at which oil and gas fields’ output declines over time has significantly accelerated globally, largely due to higher reliance on shale and deep offshore resources, meaning that companies must work much harder than before just to maintain production at today’s levels, according to the report.
‘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,’ comments IEA Executive Director Fatih Birol.
Investment in 2025 is set to be around $570bn, and if this persists, modest production growth could continue in the future, the report notes. But a relatively small drop in upstream investment can mean the difference between oil and gas supply growth and static production.
Birol continues: ‘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 situation means that the industry has to run much faster just to stand still. And careful attention needs to be paid to the potential consequences for market balances, energy security and emissions.’
Production records of around 15,000 oil and gas fields from around the world analysed by the report reveal that the global average annual observed post-peak decline rate is 5.6% for conventional oil and 6.8% for conventional natural gas. This varies widely by field type: supergiant oil fields decline by an average of 2.7% annually, while the average for small fields is more than 11.6%. Onshore oil fields decline more slowly, by an average of 4.2% per year, than those located deep offshore at 10.3%.
Onshore supergiant oil fields in the Middle East decline at 1.8%, while Europe, which is has a very high share of offshore fields, exhibits the highest decline rate at 9.7%. Tight oil and shale gas decline even more steeply: without investment, output falls by more than 35% over one year and a further 15% over a second year.
In 2010, a halt in upstream investment would have cut oil supply by just under 4mn b/d each year. Today. the equivalent figure is 5.5mn b/d, while natural gas decline rates have risen from 180bn m3/y to 270bn m3, equivalent to total natural gas production from the whole of Africa.
Against this backdrop, keeping global oil and gas production constant over time would require the development of new resources. Even with continued spending on existing fields, the IEA’s analysis shows that more than 45mn b/d of oil and nearly 2,000bn m3 of gas from new conventional fields would be required by 2050 to maintain production at today’s levels. This would be the equivalent of adding the total oil and gas production from all of the top three producers combined. The amounts could be reduced if oil and gas demand were to come down.
Around 230bn barrels of oil and 40tn m3 of gas resources have been discovered that have yet to be approved for development. The largest volumes are in the Middle East, Eurasia and Africa. Developing these resources could add around 28mn b/d and 1,300bn m3 to the supply balance by 2050.
Filling the remaining supply gap to maintain today’s production through to 2050 would require annual discoveries of 10bn barrels of oil and around 1,000bn m3 of natural gas.
The new report also highlights that it has taken almost 20 years on average to move from issuing an exploration licence for oil and gas until first production, including nearly a decade to discover new fields and a further decade for appraisal, approval and construction.
