Less than seven billion barrels of oil-equivalent have been found year-to-date
The global oil industry discovered the least amount of oil in 2017 in almost 80 years, breaking the previous record low set last year.
Less than seven billion barrels of oil-equivalent (BBOE) have been found year-to-date — a drop-off from eight BBOE discovered in 2016, according to Kallanish Energy.
Last year’s total was the lowest since the 1940s. The 2017 figure is down by more than 50 percent from the 15 BBOE discovered in 2014-2015, and down sharply from the 30 BBOE discovered in 2012, oilprice.com reported.
The plunge is the result of a third consecutive year of relatively low upstream exploration budgets. Many oil companies slashed their spending for exploration when the market downturn began in mid-2014, and they have yet to restore that spending to anything close to pre-2014 levels.
“We haven’t seen anything like this since the 1940s,” Sonia Mladá Passos, senior analyst at Rystad Energy, said in a statement. “The most worrisome fact is that the reserve replacement ratio in the current year reached only 11 percent (for oil and gas combined) — compared to over 50 percent in 2012.”
The reserve-replacement ratio measures the volume of oil discovered relative to what’s produced in a given year, the idea being, the industry needs to discover 100 percent of what it produces to avoid a decline in reserves.
Rystad said 2006 was the last year the industry posted a reserve-replacement ratio above 100 percent.