Our data shows early-life assets growing their proportion of production from 6% in 2010 to 30% by 2020. The lower decline rates of these assets acts to counter the higher declines of more mature assets.
Technology will also play a role in maintaining stable decline rates, as evidenced by developments in horizontal drilling, hydraulic fracturing, EOR techniques and CO2 flooding in the US, Canada, and Russia.
Beyond 2020: without higher investment, decline rates increase
Even moderate swings in average annual decline rates are capable of influencing the market; the rate of decline for non-OPEC fields is crucial to the global supply picture. A 1% shift in global decline rates would have a significant effect on supply, potentially adding or removing 2 million b/d by 2021.
Our current modelling shows stable decline rates until 2020, then a widening to 6% in 2021. Although the present picture is one of resilience and smart spending, further gains remain unlikely. With investment so low, the industry is potentially storing up problems for supply that won't become apparent until after the end of the decade.