Oil majors ramp up exploration to address long-term supply gap, Wood Mackenzie says
Friday, April 24 2026 - 02:03 PM WIB
By Romel S. Gurky
The world’s largest oil and gas companies are increasing investment in high-impact exploration as they seek to offset declining production and address a projected long-term supply gap, according to analysis by Wood Mackenzie.
The consultancy said the top 30 exploration and production companies face average production declines of nearly 40% between 2025 and 2040, prompting a renewed focus on frontier and ultra-deepwater exploration.
Without new discoveries or field extensions, existing producing fields are expected to supply only about 700 billion barrels of the nearly 1,000 billion barrels required to meet global liquids demand through 2050, leaving a shortfall of around 300 billion barrels.
“Companies need to look beyond near-term volatility and shape resource capture strategies to fill the gap,” the report said, noting that exploration remains economically viable despite inherent risks.
Exploration activity generated about $120 billion in value between 2021 and 2025 under a price assumption of $85 per barrel Brent, or $54 billion at $65 per barrel, after accounting for spending of around $97 billion.
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Major oil companies are increasingly taking larger equity stakes in frontier projects to secure access to resources. BP, for example, holds full ownership of its Bumerangue discovery in Brazil, which Wood Mackenzie estimates could generate $5.7 billion in value if developed.
National oil companies including Petrobras, PETRONAS and TPAO are also active in ultra-deepwater exploration, alongside independents such as Murphy Oil, APA Corporation and Woodside Energy.
Industry spending on exploration has remained relatively stable, averaging about $19 billion annually between 2021 and 2025, despite rising costs such as higher rig day rates.
Exploration efforts are increasingly focused on regions with recent major discoveries, including offshore Guyana, Brazil, Côte d’Ivoire, Indonesia and Cyprus, while companies are also targeting underexplored basins such as Brazil’s Foz do Amazonas and parts of Angola and Suriname.
Wood Mackenzie identified 23 high-impact wells to watch in 2026, including projects led by Petrobras and Equinor that could unlock new frontier basins or extend existing plays.
The report said the push into frontier exploration reflects growing concerns over energy security and the need to diversify supply sources amid evolving global demand.
Editing by Alexander Ginting