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The Energy Cliff Approaches: World Oil & Gas Discoveries Continue To Decline As the world continues to burn energy like there is no tomorrow, global oil and gas discoveries fell to another low in 2017. And to make matters worse, world oil investment has dropped 45% from its peak in 2014. If the world oil industry doesn’t increase its capital expenditures significantly, we are going to hit the Energy Cliff much sooner than later. According to Rystad Energy, total global conventional oil and gas discoveries fell to a low of 6.7 billion barrels of oil equivalent (Boe). In the article, All-time low for discovered resources in 2017, Rystad reports, it stated the following:
The critical information in the quote above is that the world only replaced 11% of its oil and gas consumption last year compared to 50% in 2012. However, the article goes on to say that the last time global oil and gas discoveries were 100% of consumption was back in 2006. So, even at high $100+ oil prices in 2013 and 2014, oil and gas discoveries were only 25% of global consumption. As I mentioned at the beginning of the article, global oil capital investment has fallen right at the very time we need it the most. In the EIA’s International Energy Outlook 2017, world oil capital investment fell 45% to $316 billion in 2016 versus $578 billion in 2014: In just ten years (2007-2016), the world oil industry spent $4.1 trillion to maintain and grow production. However, as shown in the first chart, global conventional oil and gas discoveries fell to a new low of 6.7 billion Boe in 2017. So, even though more money is being spent, the world isn’t finding much more new oil. I believe we are going to start running into serious trouble, first in the U.S. Shale Energy Industry, and then globally, within the next 1-3 years. The major global oil companies have been forced to cut capital expenditures to remain profitable and to provide free cash flow. Unfortunately, this will impact oil production in the coming years. Thus, the world will be facing the Energy Cliff much sooner than later. HOW TO SUPPORT THE SRSROCCO REPORT SITE: My goal is to reach 500 PATRON SUPPORTERS. Currently, the SRSrocco Report has 155 Patrons now! Thank you very much for those who became new members and new Patrons of the SRSrocco Report site. So please consider supporting my work on Patron by clicking the image below: Or you can go to my new Membership page by clicking the image below: Check back for new articles and updates at the SRSrocco Report. You can also follow us on Twitter, Facebook, and Youtube below:
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