November 2024 | Carbon Minefields Oil and Gas Exploration Monitor

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 carbon dioxide (CO2) released into the atmosphere if the licensed oil and gas is extracted and burned. Finally, monitoring companies’ spending on exploring and developing new oil and gas fields provides additional insights into the industry’s expansion activities. Certain data is segmented according to countries’ capacities 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.

The data below is collected by experts at the International Institute for Sustainable Development (IISD). We use AI and programming tools to extract and analyze data from Rystad Energy (2024) before reviewing all content for accuracy and clarity.

Monthly Update

New Exploration Licences Awarded

Last month, 20 oil and gas exploration licences were awarded across three countries, with a significant portion granted by Brazil. Brazil’s licences alone account for estimated volumes of 16.3 million barrels of oil and 15.5 billion cubic feet of gas. The combustion of these newly licensed reserves is projected to produce 8 million tonnes of CO2 emissions. In total, the burning of licensed reserves in all 20 licences would result in a substantial 15.1 million tonnes of CO2 emissions.

Oil and Gas Companies’ Exploration Activities

Last month, Shell, KazMunaiGaz (parent company), and LLOG invested the most in oil and gas exploration, with a total combined global exploration capital expenditure (CAPEX) of USD 470.6 million. Petrobras, CNOOC, and Shell acquired exploration licences with the highest embodied emissions, primarily from countries like Brazil, Kazakhstan, and Iraq.

Rolling Annual Update

Licences Awarded

In the last twelve months, 1,029 oil and gas licenses were awarded. If fully exploited and burned, this would result in a total of 2,479.4 million tonnes of CO2 emissions. The largest volume of embodied emissions, amounting to 632.9 million tonnes of CO2, was awarded in May 2024. The countries granting these licences, particularly those with limited capacity to transition away from fossil fuel production and low reliance on these resources, contributed significantly to these emissions.

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 much a country’s socio-economic welfare depends on extraction.

Exploration Capital Expenditures (CAPEX)

The total CAPEX for oil and gas exploration projects discovered or awarded in the last 12 months reached USD 28.2 billion, with the highest investments in January 2024. On average, monthly CAPEX stands at USD 2.4 billion. Eni, Shell, and CNOOC lead the investment charge, collectively contributing USD 3.9 billion to exploration endeavours.

Outlook

Ongoing and Upcoming Licensing Rounds

As of last month, 46 blocks were open for bidding or under evaluation for oil and gas exploration. Looking ahead, the upcoming licensing rounds in the next 6 months are expected to make available a significant number of blocks, totalling 348. The estimated global emissions resulting from burning the fuel reserves in these upcoming rounds is a substantial 9,279.2 MtCO2. Noteworthy is Indonesia, which leads with the most blocks planned for the upcoming licensing rounds. The oil and gas reserves in Indonesia's blocks have the potential to produce 621.0 MtCO2 if burned.

Global Exploration Trends

While licensing activities remain above 2020 and 2021 levels, there has been a decline in awarded acreage compared to 2023 and 2022. This can be partly explained by licensing round cancellations, including in the Democratic Republic of the Congo, which cancelled its licensing round of 27 blocks launched in 2022.

Some notable recent licensing rounds include Kazakhstan, which awarded additional blocks to QazaqGaz, its national gas company, and Cöte d’Ivoire, which awarded an offshore exploration licence to Eni. Some countries that have recently opened licensing rounds for bidding include Canada, which is offering offshore exploration licences in Newfoundland; Oman, which has opened bids for a major offshore block in the Southern Gulf of Oman; and Algeria, which plans to continue opening licensing rounds for the next 5 years. 

About the Carbon Minefields Newsletter

This newsletter is produced using data from Rystad Energy (2024) extracted from the UCubeExploration Browser v. 2024-11-07 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 November 12, 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.