This newsletter provides monthly updates on global oil and gas expansion, 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 are extracted and burned. Finally, monitoring 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, 11 oil and gas exploration licences were awarded across three countries. Among these countries, Australia awarded licences with the largest volume of embodied emissions. The licences granted by Australia included an estimated 0.4 million barrels of oil and 190.9 billion cubic feet of gas. Burning these fuels would result in approximately 11.9 million tonnes of CO2 emissions. The total emissions that would be produced if all the newly licensed reserves were combusted amount to 28.6 million tonnes of CO2, highlighting the significant environmental impact of these fossil fuel exploration activities.

Oil and Gas Companies’ Exploration Activities

Last month, the top companies investing in oil and gas exploration included Lukoil, Sichuan Energy Co, and Denison Gas, with exploration licences predominantly from Russia, China, and Australia. These licences carry significant potential emissions if the reserves are burned. The global exploration capital expenditure (CAPEX) for projects discovered or awarded in the same period amounted to USD 679.3 million. Sichuan Energy Co, Lukoil, and ONGC stood out as the top spenders, collectively investing USD 358.0 million.

Rolling Annual Update

Licences Awarded

In the past 12 months, oil and gas exploration licences awarded globally could result in 1,808.5 MtCO2 emissions if the reserves are burned. The month with the highest volume of embodied emissions in awarded licences was May 2024, accounting for 620.6 MtCO2 alone. Countries with limited capacity to transition away from oil and gas production and low reliance on these fuels have been among the top licensors. Notably, Mozambique stands out as the country that awarded licences carrying the largest volume of embodied 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 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 CAPEX

In the past 12 months, CAPEX in oil and gas exploration has reached USD 24.4 billion, with the highest investments being made in projects awarded or discovered in January 2024. On average, monthly CAPEX stands at USD 2.0 billion. Leading the investments are Saudi Aramco, Shell, and Eni, with combined spending of USD 3.9 billion in exploration projects.

Outlook

Ongoing and Upcoming Licensing Rounds

As of last month, there were 18 blocks open for bidding or under evaluation for oil and gas exploration. Looking ahead, upcoming licensing rounds are anticipated to increase significantly, with 302 blocks planned to be available in 2024. The estimated global emissions from burning the fuel reserves from these upcoming rounds reach 5,706.4 MtCO2. China is a key player in these upcoming rounds, with the highest number of blocks planned to be available. The oil and gas reserves in China’s blocks alone could emit 917.7 MtCO2 if fully burned.

Global Exploration Trends

The global oil and gas industry has seen a decrease in awarded acreage in the first eight months of 2024 compared to 2023, with 317,700 square kilometres allocated. This decrease is partly due to delays in licensing rounds, such as in Guyana. A notable increase in awarded acreage is expected for the rest of the year, with licences to be awarded by Indonesia, Egypt, Suriname, Poland, Australia, China, Oman, Guyana, Trinidad and Tobago, Russia, Lebanon, Mauritania, Nepal, and Mongolia. Furthermore, new licensing rounds were launched last month in Egypt, Peru, and Liberia, and India and Guyana are expected to launch them soon.

About the Carbon Minefields Newsletter

This newsletter is produced using data from Rystad Energy (2024) extracted from the UCubeExploration Browser v. 2024-09-06 and published with Rystad’s permission.  The authors calculated embodied emission estimates using the IPCC 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 September 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