December 2024 | Carbon Minefields Oil and Gas Exploration Monitor

In 2024, to date, more than 412,000 square kilometres of land and water were licensed for oil and gas exploration to the mining industry. While the total acreage awarded has declined over the last decade, total exploration spending—regardless of when licences were awarded—has risen from 2020 (the year most affected by the COVID-19 pandemic), with about USD 54 billion so far spent in 2024. Of this amount, USD 15 billion is expected to be invested in oil and gas exploration by year’s end in blocks licensed in 2024. These could add more than 2.3 billion tonnes of CO2 to the atmosphere if fully exploited. There are still more than 1,120 offshore blocks for which bids are under evaluation in Norway and 4,509 blocks in Alaska that could be awarded this year.

Over the next 5 months, planned licensing rounds could unleash as much as 18 billion tonnes of CO2 emissions. China accounts for more than half of the total. However, there are good reasons for governments to defer or cancel these licensing rounds. Even under current climate policies, the International Energy Agency forecasts that oil and gas demand will peak by 2030. Frontier projects risk becoming stranded assets. Halting new licences is easier, politically and legally, than closing existing fields early.

Monthly Update

New Exploration Licences Awarded

Last month, 23 oil and gas exploration licences were awarded across five countries, with Russia granting the licences that account for the largest portion of embodied emissions. The licences issued by Russia include 84.6 million barrels of oil and 918 billion cubic feet of gas, which would result in emissions of 96.9 million tonnes of CO2 if burned. Overall, if the reserves from all 23 licences were to be exploited, it would lead to 184.0 million tonnes of CO2 emissions.

Oil and Gas Companies' Exploration Activities

During the last month, the top investors in new oil and gas exploration licences were BP, Eni, and Rosneft, having collectively spent USD 1,146.5 million out of the global exploration capital expenditure (CapEx) of USD 1,465.4 million. The exploration licences with the highest embodied emissions were acquired by Rosneft, BP, and Eni, mostly from countries like Russia, Trinidad and Tobago, and Côte d’Ivoire.

Rolling Annual Update

Licences Awarded

In the last 12 months, 1,027 oil and gas exploration licences have been awarded, which will result in 2,783.7 MtCO2 of emissions once these reserves are burned. The month with the highest volume of embodied emissions was May 2024, accounting for 640.1 MtCO2. Countries that have a low capacity to phase out oil and gas production and low dependence on these fuels have awarded licences with the highest estimated volume of embodied emissions. Among them, Mozambique stands out as the country that awarded licences with the largest volume of embodied emissions, from just six blocks.

Note: The embodied carbon emissions from newly awarded licences are presented based on four country groups based on the Civil Society Equity Review (2023) categorization. Countries are grouped based on two main axes: 1) their capacity to transition and 2) their dependence on fossil fuels, which provides a rationale to determine how fast they should phase out their domestic production. These indicators are measured based on countries’ ability to deal with the costs and disruptions of climate change and historical emissions, as well as an assessment of how dependent a country’s socio-economic welfare is on extraction.

Exploration CapEx

In the past 12 months, USD 18 billion has been invested in newly licensed oil and gas exploration projects, with December 2023 projects attracting the highest investments. On average, monthly CapEx stands at USD 1.5 billion. Leading the investments are Shell, Chevron, and BP, collectively contributing USD 3.1 billion to exploration projects awarded in the last 12 months.

Outlook

Ongoing and Upcoming Licensing Rounds

As of last month, 48 oil and gas blocks were open for bidding or under evaluation. Looking ahead to the next 6 months, a significant increase is expected, with 371 blocks planned to be available for licensing rounds. The estimated global emissions from burning the fuel reserves in these upcoming blocks amount to a substantial 18,292.4 MtCO2. China plans to make the highest volumes of oil and gas available, with more than 10 billion tonnes of embodied CO2 emissions.

About the Carbon Minefields Newsletter

This newsletter provides monthly updates on oil and gas expansion globally, reporting on every new oil and gas exploration licence awarded. It also tracks the climate impact of these licences, translating them into total embodied emissions—that is, the amount of CO2 released into the atmosphere if the licensed oil and gas is extracted and burned. Finally, the monitoring of companies’ spending to explore and develop new oil and gas fields provides additional insights into the industry’s expansion activities. Certain data are segmented according to countries’ capacity to transition away from oil and gas.

Halting new fossil fuel projects is a key step in limiting global warming to 1.5°C and transitioning away from fossil fuels, as agreed by 198 countries at the 28th UN Climate Change Conference (COP 28). Research by Green et al. (2024) in Science shows there is more than enough oil and gas in existing fields to meet Paris-aligned energy demand. Accordingly, the Carbon Minefields newsletter monitors efforts to expand oil and gas production beyond already operating fields—flagging misalignment with the Paris Agreement target.

This newsletter is produced using data from Rystad Energy (2024) extracted from the UCubeExploration Browser v. 2024-12-03 and published with Rystad’s permission. Embodied emission estimates were calculated by the authors using the Intergovernmental Panel on Climate Change emission factors of crude oil, condensate, natural gas liquids, and gas. Data manipulation is automated with Python programming. Most text is generated with OpenAI's application programming interface using GPT-3.5 Turbo. The AI-generated outputs for this edition were produced on December 9, 2024. International Institute for Sustainable Development experts review all AI-generated content for accuracy, clarity, and further interpretation.

For more information regarding the data presented and for national-level disaggregation, please contact us at oboisvonkursk@iisd.ca or ceposadap@iisd.ca.

* Due to changes in the underlying database, this month’s edition reports on exploration CapEx spent on projects awarded last month or in the last 12 months (see Tables 2 and 4), while previous editions reported both on projects awarded and discovered in those time periods.