“Scraping the barrel” - WoodMac highlghts scarcity of “advantaged” barrels

THE ENERGY TRANSITION will require oil and gas for decades to come, but the supply of lower-cost, lower-carbon “advantaged” barrels remain scarce, threatening emissions targets and causing upstream providers to pivot to new strategies, according to “Scraping the Barrel” a new Horizons analysis from Wood Mackenzie.

Wood Mackenzie’s analysis concludes that in terms of overall supply, total discovered and prospective oil and gas resources are more than double projected demand in 2050. However, truly advantaged resources, with low breakeven (resilience to low prices) and emissions (sustainability in scope 1 and 2 terms) are anything but plentiful. Most developed fields have little to offer and only 28% of the resources in commercial undeveloped fields, roughly 49bn barrels of equivalent (boe), are advantaged in terms of breakeven below US$30 Brent with emissions intensity of less than 20 kgCO2e/boe.

With few advantaged resources in brownfields and undeveloped fields, exploration could play a key role in locating and increasing this supply.

The industry discovered 22bn boe in new fields between 2012 and 2021, with an average emissions intensity of 16 kgCO2e/boe, versus the current global average of 23 kgCO2e/boe (19 kgCO2e/boe for undeveloped fields), and with a weighted average cost of supply in Brent price terms of just US$33/bbl.