As operating oil and gas fields are maturing while global demand still grows, international majors have set their sights on
increasing frontier exploration and expanding conventional energy projects worldwide.
Global Field Output Declines Accelerate
The world needs investments in existing oil and gas fields just to curb the accelerating output declines, the International Energy Agency (IEA) said in a recent report, “The Implications of Oil and Gas Field Decline Rates”.
The average rate at which output at oil and gas fields declines over time has significantly accelerated across geographies, largely due to higher reliance on shale and deep offshore resources, the report found. Energy companies will now have to work much harder before just to maintain production at today’s levels, the IEA said.
Nearly 90 percent 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 US$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, the IEA reckons.
If all capital investment in existing sources of oil and gas production were to cease immediately, global oil production would fall by 8 percent per year on average over the next decade, or by around 5.5 million barrels per day (bpd) each year. This is equivalent to losing more than the annual output of Brazil and Norway each year, according to the agency’s estimates. Natural gas production would fall by an average of 9 percent, or by 270 bcm, each year, equivalent to total natural gas production from the whole of Africa today.
“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,” said IEA Executive Director Fatih Birol.
“In the case of oil, an absence of upstream investment would remove the equivalent of Brazil and Norway’s combined production each year from the global market balance. 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.”
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 45 million bpd of oil and nearly 2,000 bcm 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, according to the IEA.
The Return of Frontier Exploration
The rise in oil and gas demand and decline in discovered resources have prompted the industry to pursue frontier discoveries amid a global focus on energy security, Rystad Energy said in a report in September.
The six global majors – ExxonMobil, Chevron, Shell, TotalEnergies, BP, and Eni – have been responsible for about 20 percent of the total conventional oil and gas volumes discovered since 2020, the intelligence firm said.
“Overall, the six majors are pushing the boundaries of exploration, targeting frontier areas in search of new discoveries to sustain their businesses. While the risks are high, the potential rewards are significant, and the industry is likely to see increased activity in these regions in the coming years,” said Taiyab Zain Shariff, Vice President – Upstream Exploration at Rystad Energy.
Exxon targets Trinidad and Tobago for exploration to potentially replicate its success in Guyana, TotalEnergies is betting on Suriname, BP made a massive discovery offshore Brazil and vies for Libya and Caspian Sea exploration, while Eni, with its “dual exploration” strategy, targets resources and fast monetisation of oil and gas discoveries offshore Africa.
West Africa Potential
For example, at the end of September, Eni completed the sale of 30 percent in its operational Baleine oil and gas project offshore Cote d’Ivoire to Vitol Group, the world’s biggest independent oil trader.
The sale of the minority stake in Baleine is part of Eni’s strategy to optimise its upstream portfolio by accelerating the monetisation of exploration discoveries through the divestment of equity stakes, a model it has dubbed the “dual exploration model.” Eni has been pursuing this model in recent years—to sell part of its stake in operated assets to other companies to fast-track oil and gas discoveries to production.
Eni and Vitol are also partners in the OCTP and Block 4 projects in Ghana, and are now further consolidating cooperation in West Africa.
In the West Africa region, established producers Nigeria and Angola seek fiscal reforms for their mature basins, while a wave of high-impact exploration efforts are under way in Namibia, Ghana, Cote d’Ivoire, and the west coast of South Africa.
“While Nigeria and Angola introduce fiscal reforms for mature offshore basins, high-impact exploration reveals untapped potential for Cretaceous plays,” Ian Thom, Research Director, Upstream, at Wood Mackenzie, says.
Nigeria and Angola have enacted incentives to stimulate investment and project approvals, Thom added.
“While Nigeria and Angola work to revitalise their existing assets, a more dramatic story of frontier exploration is unfolding across West Africa offshore. A strategic pivot from traditional Tertiary-age reservoirs to deeper, more complex Cretaceous plays has gained momentum,” the expert noted.
TotalEnergies and Shell are driving this exploration shift that has been catalysed by a string of game-changing discoveries like Ghana’s Jubilee, Venus and Graff in Namibia, and Baleine in Côte d’Ivoire.
However, more than half of the recently discovered resources remain sub-commercial, hindered by challenges such as low reservoir permeability and, critically, the lack of viable markets and infrastructure for the associated gas, according to WoodMac.
The rapid development of Baleine stands in contrast to the slower progress at Namibia’s oil and gas discoveries.
“This shows that above-ground factors are just as important as below-ground potential,” Thom said.
Ultimately, West Africa’s upstream future would depend on both fiscal ingenuity in mature basins and continued exploration success in frontier plays that can deliver the next generation of world-class energy projects, he added.
Middle East NOCs Balance Regional Needs with Global Energy Shifts
The national oil companies (NOCs) in the Middle East continue to play a pivotal role in global energy security amid shifting market dynamics and the energy transition, Aditya Saraswat, Senior Vice President, Research Director MENA, at Rystad Energy, wrote in a recent special insight.
The Middle East’s NOCs are expanding capacity and scaling international portfolios amid slowing growth from non-OPEC+ supply and higher hurdles to global upstream investment.
The NOCs have low breakeven costs, strong domestic bases, and strategic ambitions, and are well-positioned to meet growing international demand for energy, Saraswat reckons.
Backed by over 6.5 million barrels per day of surplus crude capacity as of the end of the first half of 2025, and $400 billion worth of project sanctioning through 2020-2035, particularly in gas and offshore projects, the Middle East is poised to sustain its energy leadership while driving economic diversification and low-carbon growth.
Ongoing crude oil expansion projects in the UAE, Saudi Arabia, Iraq, and Kuwait are focused on maintaining and further increasing capacity. For Saudi Arabia and the UAE, offshore developments at prolific fields like Upper and Lower Zakum, Berri, Marjan, and Zuluf are crucial for their targets of 12 million bpd and 5 million bpd, respectively. Additional expansions at Upper Zakum, Safaniya, and Manifa could provide further capacity boosts as both countries look to offset declines from their onshore assets, which have shouldered over half of the overall output up until now, according to Rystad Energy.
Moreover, amid the ongoing OPEC+ production agreements, which limit Middle East NOCs from fully harnessing their domestic production potential, these companies have strategically pivoted toward aggressive international expansion to sustain growth, Saraswat notes.