The Implications of Oil and Gas Field Decline Rates

Declines in output from existing oil and gas fields have gathered speed, with implications for markets and energy security

Without continued investment in these fields, the world would lose the equivalent of Brazil and Norway’s combined production from the global oil balance each year

IEA 16 September 2025

The average rate at which oil and gas fields’ output declines over time has significantly accelerated globally, largely due to higher reliance on shale and deep offshore resources, meaning that companies must work much harder than before just to maintain production at today’s levels, according to a new IEA report.

The international conversation over the future of oil and gas often focuses on demand trends while the factors affecting supply receive considerably less attention. The new IEA report, The Implications of Oil and Gas Field Decline Rates, seeks to rebalance this debate by drawing on previous groundbreaking IEA analysis on decline rates and exploring what has changed. The new analysis draws on production data from around 15 000 oil and gas fields from around the world.

“Only a small portion of upstream oil and gas investment is used to meet increases in demand while nearly 90% of upstream investment annually is dedicated to offsetting losses of supply at existing fields,” said IEA Executive Director Fatih Birol. “Decline rates are the elephant in the room for any discussion of investment needs in oil and gas, and our new analysis shows that they have accelerated in recent years. In the case of oil, an absence of upstream investment would remove the equivalent of Brazil and Norway’s combined production each year from the global market balance. The situation means that the industry has to run much faster just to stand still. And careful attention needs to be paid to the potential consequences for market balances, energy security and emissions.”

Decline rates vary widely across field types and geographies. Onshore supergiant oil fields in the Middle East decline at less than 2% per year, while smaller offshore fields in Europe average more than 15% per year, according to the report. Tight oil and shale gas decline even more steeply: without investment, output falls by more than 35% over one year and a further 15% over a second year.

In 2010, a halt in upstream investment would have cut oil supply by just under 4 million barrels per day (mb/d) each year. Today the equivalent figure is 5.5 mb/d, while natural gas decline rates have risen from 180 billion cubic metres (bcm) per year to 270 bcm.

Against this backdrop, keeping global oil and gas production constant over time would require the development of new resources. Even with continued spending on existing fields, the IEA’s analysis shows that more than 45 mb/d of oil and nearly 2 000 bcm of gas from new conventional fields would be required by 2050 to maintain production at today’s levels. This would be the equivalent of adding the total oil and gas production from all of the top three producers combined. The amounts could be reduced if oil and gas demand were to come down.

The new report also highlights that it has taken almost 20 years on average to move from issuing an exploration license for oil and gas until first production, including nearly a decade to discover new fields and a further decade for appraisal, approval and construction.

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Permalink Reply by Jesse Joyner 12 hours ago

Thanks for posting this, Skip. The article is seriously insightful. Good stuff. And there seems to be echoes of the tagline from CBS's BIG BROTHER/SURVIVOR -- to "expect the unexpected." So now I'm beginning to get a good bit more hopeful in regards to our Haynesville assets. The data-center nexus between Ai and NG appears to be yet another unexpected boon to us shale mineral owners. For the big-money high-tech guys to be placing data-center location bets in Louisiana, is eye-opening. Reminds me of the initial wave of LNG export terminals, which got my hopes up for higher NG prices. But, as you know, O&G pricing is way hard to prognosticate. Yeah, we've all been burned by overproduction before -- which precipitates lower futures bets and a glut of storage. So realistically, having been riding in this rodeo for many years, I know to "expect the unexpected." Ai is now the unexpected (as your posts have alluded to for quite awhile). Let's hope the "sisters" and Indies control their drilling and don't overproduce like they always do. I mean, like, there outta be a law, y'know? And sadly, there used to be a law. It was called regulated NG pricing. I liked regulated pricing. Years back, under regulation, our royalty payments were higher due to stronger pricing and were more consistent per wellhead regulated pricing, futures' gaming, and controlled production -- i.e., before fracking and horizontal drilling began dominating the drilling. Now, of course, my family has greatly benefited from both. That dual technology bump really brought in the bacon. So will Ai and the new data-center demand break the mold and truly give us sustainable higher prices for a number of years? Let's hope so. Counting sugar plums springs eternal in the oil patch. Yep, we gotta hope. Thank you, sir, for all that you do, Skip. It means a lot to hundreds if not thousands of people on GHS. Enjoy the fishing.     

Permalink Reply by Skip Peel - Mineral Consultant 12 hours ago

You're welcome, Jesse.  The current strategy for O&G CEOs is based on the desires of the stock market and major investors and the decline in O&G reserves.  I doubt we will see another era of over supply and depressed prices for natural gas.  Oil is a whole different story.  OPEC+ will be a huge factor.  One reason to manage remaining reserves for companies whether focused on oil or natural gas is to not only maintain a certain level of profitability but also to build up capital for what comes next.  All those CEOs know that the age of fossil fuels is coming to an end.  And they have a decade or two possibly to figure out what is next.  We already see super majors like Exxon moving into not just lithium but also other battery technologies such as anodes (graphite).  A number of those companies may find their way into geothermal which by the way could easily replace the natural gas that is the prime energy source for data centers currently.  We should keep in mind that these are "energy" companies and that the energy of the future will not be oil or natural gas.  US LNG could very well end up being the greatest stranded assets in modern history.

Permalink Reply by Jesse Joyner 11 hours ago

Yeah, it's hard to predict oil's future. My dad and grandpa would roll over in their graves, seeing so much NG production. Oil was king for a hundred years. Forgive my fantasy thinking, but it's hard to fathom how much oil has been produced in the Middle East. A good ol' boy from Bossier Parish would think that Saudi oil reserves have to be on the decline due to the many decades of production. Yet the Saudi's play it tight to the chest. Such a poker game. In this case, the unexpected would be way lower reserves than is estimated. But that's probably not true. Just a good ol' boy's pipe dream. Of course, us Louisiana boys can still dream that the smackover will one day have drilling straws gushing oil. Which, of course, is false wishful/magical thinking. Yet lithium does seems to be a real "comer" on the dice board. Maybe. Keep up the good work, Skip. 

Permalink Reply by Skip Peel - Mineral Consultant 11 hours ago

Every major O&G petrostate is looking at reserves and calculating how long they can produce.  OPEC+ especially the Saudis have a lot more reserves than the US and know that the global energy future is not fossil fuels.  They also don't have to worry about what the stock market or investors think.  If you have fifty years of reserves but an expectation that oil will be in demand for only half that time or less, why not overproduce now.  No one or country wants to have a lot of oil left in the ground when the world not longer needs or wants it.  The future is electrification.  And it is coming sooner than many think or claim.

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