Upstream

Conventional onshore oil production will continue to play an important role in the global energy mix for decades to come. Our model forecasts conventional onshore oil production to decline by 1.9%/yr on average until 2050, but that it will still account for approximately 45% of all oil production by then. 

Unconventional onshore oil production remains flat at 12.6 million barrels per day (Mb/d) between now and 2025. Beyond that date, it declines in proportion to overall oil demand until the end of the forecast period in 2050, where it will be 8.6 Mb/d, around 18% of global crude oil production. 

Offshore oil production will still be important in 2050. However, our model forecasts it to reduce by 30% from today’s 25.4 Mb/d to 17.7 Mb/d — 37% of total crude oil production in 2050 — as producers increase their focus on easier-to-access oil resources. 

Given this trend, we believe that the industry’s appetite for producing resources from challenging environments, such as deepwater or Arctic locations, will change, as the commercial and social costs of such developments may become prohibitive. However, we already see some differing opinions emerging over Arctic developments, with Norway and Canada trending negatively in their opinion of such projects, while Russia and the US trend positively. Deepwater production costs have reduced significantly, but they still have some way to go to compete with the lower lifting costs and proximity to markets of onshore shale deposits. 

Conventional onshore gas production will peak in 2033, with offshore gas production peaking in 2040. 

Unconventional onshore gas is forecast to continue rising slowly to mid-century. This will provide more flexible access to gas at lower cost, allowing gas to remain competitive as the cost of renewable energy production falls. Conventional onshore gas production has already begun to fall steadily in North America, but it will continue to rise in North East Eurasia until 2033, before also beginning to decline. Total gas production in the Middle East and North Africa will increase until about 2034 then begin to slow down. Unconventional onshore gas will retain an important share in gas supply in North America, with production remaining stable until 2050. 

The oil and gas industry will continue to invest in enhancing efficiency to control costs and maintain the important role that our model forecasts for hydrocarbons in the lead-up to the mid-century. 

Advances in standardization and the ability to incorporate elements of past asset designs will help simplify requirements , leading to improvements in the efficiency of the upstream project-design process both onshore and offshore. Improved reliability of equipment, subsea wifi, autonomous underwater vehicles, and the switch to all-electric utilities will make it possible to move more assets subsea. Assets that are not subsea will be designed for use by robots rather than people, leading to a fundamental change in the approach to, and simplicity of, designs. Autonomous supply vessels are rapidly moving closer to becoming reality. 

The oil and gas industry will continue to invest in enhancing efficiency to control costs and maintain the important role that our model forecasts for hydrocarbons. 

Despite our desire to decarbonize, some developing countries will seek to exploit national resources as a matter of strategic priority. We recognize that the desire to exploit hydrocarbon resources in these regions has the potential to outweigh the considerations of our model.

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