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Lowest Oil Discoveries Rate in 70 Years | ASHARQ AL-AWSAT English Archive 2005 -2017
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Oil Drillers David McNew / Getty Images / AFP

New York – News reports revealed on Wednesday that oil discoveries had recorded their lowest rate in 70 years reaching 10% of the average discoveries. This year, explorers expect the ratio to further decrease which raised fears of inability to meet future demands.

UK-based consultancy Wood Mackenzie said that the decline in crude prices over the last two years forced oil companies to cut exploration budgets to unprecedented levels.

Last year, oil discoveries reached 2.7 billion barrels, which is the lowest since 1947, while this year drillers found just 736 million barrels.

Bloomberg announced that these numbers are worrisome and are of a concern for the international oil industry.

U.S. Energy Information Administration estimates that global oil demand will grow from 94.8 million bpd this year to 105.3 million in 2026.

U.S. rock oil could make up the difference in the increased demand, yet oil prices remaining below $50 a barrel have eliminated any substantial growth there, given the high cost of extraction of rock oil.

Senior project manager at Nerwegian-based consultants Rystad Energy Nils Henrik Bjurstroem said that new oil discoveries are “at rock bottom”.

He added that: “There will definitely be a strong impact on oil and gas supply, and especially oil.”

Meanwhile, international reservoir has increased since Russia and OPEC increased their output despite the drop in prices, given that oil-producing countries are trying to defend their market share.

But Bjurstroem said that years of under-investment will be revealed as soon as 2025, as producers will replace little more than one in 20 of the barrels consumed this year.

It is worth mentioning that global spending on exploration, starting from seismic studies to actual drilling, has been reduced to $40 billion this year from about $100 billion in 2014, according to vice president of Wood Mackenzie Andrew Latham.