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, 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 is 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.

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, 19 oil and gas exploration licences were awarded across eight countries, with a concerning estimated volume of embodied emissions reaching 147.1 million tonnes of CO2. Particularly alarming is Russia's contribution, with the country awarding licences that hold approximately 68.3 million barrels of oil and 772.8 billion cubic feet of gas, resulting in a staggering 89.5 million tonnes of CO2 emissions if these fossil fuels were to be burned. These figures highlight the potential environmental impact of the continued exploration and extraction of fossil fuels, emphasizing the importance of transitioning toward cleaner and more sustainable energy sources to mitigate the climate crisis.

Oil and Gas Companies’ Exploration Activities

During the last month, the companies that invested the most in oil and gas exploration projects were Ilbiris-1, Harbour Energy, and Walter, collectively spending USD 377.1 million. The exploration licences with the highest embodied emissions went to Ilbiris-1, Petronas, and Shell, mainly from Russia, United Arab Emirates (UAE), and Trinidad and Tobago. The potential emissions from burning the licensed reserves are significant. The global exploration CAPEX into projects discovered or awarded last month totalled USD 1,055.7 million, signalling continued reliance on fossil fuels despite growing concerns about climate change.

Rolling Annual Update

Licences Awarded

Over the last 12 months, oil and gas exploration licences have been awarded with a total carbon emission potential of 2,142.8 MtCO2 when burned. The largest volume of embodied emissions, reaching 627.4 MtCO2, was licensed in May 2024. Countries with limited capacity to phase out oil and gas production and low reliance on these fuels were the main contributors to this total. Among these nations, Mozambique stood out for awarding licences with the highest volume of embodied emissions. The data highlights the significant environmental impact of these recent licensing activities, emphasizing the ongoing challenge of balancing energy demands with climate change concerns.

Note: The embodied carbon emissions from newly awarded licenses 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 is dependent on extraction.

Exploration Capital Expenditures (CAPEX)

In the past 12 months, capital investment in oil and gas exploration has reached USD 26 billion, with projects awarded or discovered in January 2024 attracting the highest investments. On average, monthly CAPEX stands at USD 2.2 billion. Companies leading the investment charge include Petronas, CNOOC, and Shell, collectively contributing USD 3.7 billion toward exploration projects.

Outlook

Ongoing and Upcoming Licensing Rounds

As of last month, 52 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 set to offer a significant number of blocks, with 467 planned to be available. The estimated global emissions from burning the fuel reserves in these upcoming blocks are projected to be 14,897.6 MtCO2. Notably, China leads in the number of blocks planned to be available in upcoming licensing rounds, with the oil and gas reserves in these blocks having the potential to generate 2,923.2 MtCO2 if extracted and burnt. 

Global Exploration Trends

After a reduction in awarded acreage during 2020 and 2021, licensing activities increased in 2022 and 2023. While the total for the first three quarters of 2024 was lower than the same period the previous year, a surge of leasing rounds is projected. In the next 6 months, upcoming lease rounds aim to access oil and gas reserves that, if fully exploited, would release 15 billion tonnes of CO2, nearly as much as the combined emissions from the United States and China in 2022.

There is no space for new oil and gas fields under a 1.5°C global warming limit. Even under current policy settings, which see temperatures exceeding 1.5°C, the International Energy Agency forecasts an abundance of oil and gas supply to the end of the decade. That will put downward pressure on prices, increasing the risk that expanding oil and gas production will not pay off.

About the Carbon Minefields Newsletter

This newsletter is produced using data from Rystad Energy (2024) extracted from the UCubeExploration Browser v. 2024-10-10 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 October 16, 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