Boosting oil and gas: why investment matters more today

AMP
Sep 17
2 min read

Oil and gas fields naturally lose output over time, but the pace of these declines is accelerating.

According to a new IEA report, this trend has huge implications for markets, investment, and energy security.

Without continued investment, the world could lose each year the equivalent of Brazil and Norway’s combined production, making decline rates a central issue for the industry.

Why It matters for companies and policy makers

For operators, understanding decline rates is vital.

It influences decisions on whether to develop, sustain, or abandon fields, and where to allocate capital.

For governments, these trends impact energy security, fiscal regimes, exploration awards, and strategies for balancing domestic output with imports.

The scale of the challenge

Declines vary widely by resource type and geography.

Onshore giants in the Middle East lose less than 2% annually, while small offshore fields in Europe fall by more than 15% each year.

Shale and tight oil fields decline even faster, with output falling by over 35% in the first year without reinvestment.

By comparison, in 2010 a halt in upstream investment would have cut oil supply by 4 million barrels per day each year; today the figure has risen to 5.5 million.

Natural gas decline rates have also increased, from 180 bcm to 270 bcm annually.

Investment needs and energy security

Nearly 90% of upstream oil and gas investment already goes to offsetting declines, not meeting new demand.

Maintaining today’s output to 2050 would require more than 45 million barrels per day of oil and nearly 2,000 bcm of gas from new fields, an amount equivalent to the current production of the world’s top three producers combined.

Even with stable demand, new projects will be essential.

Technology and transparency as solutions

The report highlights several areas for action:

Enhanced oil recovery (EOR): Using CO₂-based technologies can boost production while capturing emissions.
Data transparency: Better reporting on decline rates and reservoir performance would help markets and governments plan effectively.
Decommissioning funds: Planning for field abandonment can reduce environmental risks.
Water management: Recycling and responsible disposal of produced water is increasingly critical.

A future defined by supply-side risks

Debates on the future of oil and gas often focus on demand, but supply is equally fragile.

Accelerating decline rates and growing reliance on complex resources mean companies must run harder just to keep production steady.

With project development timelines averaging 20 years from license to first production, decisions taken today will shape the balance of markets, prices, and energy security for decades to come.