New Delhi: Output from the world’s oil and gas fields is declining at a faster pace than before, raising risks for market balances and energy security, the International Energy Agency (IEA) said on Tuesday. The agency’s new report, The Implications of Oil and Gas Field Decline Rates, draws on data from more than 15,000 fields worldwide and shows that nearly 90 percent of upstream investment is now used just to offset losses from existing projects, leaving little to meet new demand.
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“Only a small portion of upstream oil and gas investment is used to meet increases in demand while nearly 90% of upstream investment annually is dedicated to offsetting losses of supply at existing fields,” said IEA Executive Director Fatih Birol. “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. 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.”
Decline rates vary widely across regions and field types. Onshore supergiant oil fields in the Middle East lose less than 2 percent per year, while smaller offshore fields in Europe average more than 15 percent. Tight oil and shale gas fall even more steeply, dropping more than 35 percent in the first year without reinvestment and a further 15 percent in the second year.
The IEA’s data show that Asia Pacific — which includes India — has one of the largest concentrations of fields already in advanced decline phases, both onshore and offshore. This heightens the region’s vulnerability, especially for India, where aging basins and slow exploration progress already pose risks of deepening import dependence.
The report finds that average annual oil supply losses from natural decline have risen from just under 4 million barrels per day in 2010 to 5.5 million barrels per day in 2025. Natural gas losses climbed from 180 billion cubic metres (bcm) to 270 bcm over the same period.
Importantly, the IEA distinguishes between “natural decline rates” — the trajectory without reinvestment — and “observed decline rates,” where spending on enhanced recovery slows the fall. Bridging this gap requires sustained reinvestment year after year.
Upstream capital spending has been broadly stable in its allocation pattern: around 40 percent goes into existing conventional fields, 20–30 percent into new conventional projects, 20–25 percent into US shale and tight oil, and about 10 percent into exploration. This mix underlines how little capital is available to discover and develop entirely new resources.
According to the IEA, keeping output at today’s levels would require developing more than 45 million barrels per day of new oil supply and nearly 2,000 bcm of gas by 2050 — equivalent to the combined production of the world’s top three producers today.
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The report also stresses the long development cycles in upstream oil and gas. It now takes almost 20 years on average to move from issuing an exploration licence to first production, including nearly a decade to discover a field and another for appraisal, approvals and construction.