- Global upstream sector faces a 300 billion barrel supply shortfall by 2050 without new discoveries.
- Production from top 30 E and P companies set to decline by nearly 40% between 2025 and 2040.
- Ultra deepwater exploration emerges as a strategic priority for energy security and resource access.
The world’s largest exploration and production companies are accelerating investment in high impact frontier exploration as declining output and long term energy security concerns reshape upstream strategies.
New analysis from Wood Mackenzie shows that the top 30 global E and P players could see production fall by almost 40% between 2025 and 2040, prompting a renewed push into ultra deep water and under-explored basins.
The report highlights a growing supply gap, with the industry expected to fall short by 300 billion barrels of oil by 2050. Existing producing fields are projected to deliver around 700 billion barrels, well below the nearly 1000 billion barrels required to meet cumulative liquids demand under current forecasts.
Exploration is therefore regaining prominence as a value driver. Between 2021 and 2025, the sector generated US$120 billion in value at US$85 per barrel Brent, or US$54 billion at US$65 per barrel, after accounting for US$97 billion in exploration spending.
Resource security is increasingly shaping investment decisions. Major oil companies are taking larger equity stakes in frontier assets to secure access to competitive resources. BP, for example, holds full ownership of its Bumerangue discovery offshore Brazil, announced in August 2025. A successful development is valued at US$5.7 billion and is expected to lift total exploration value creation in 2025 to more than US$10 billion.
A core group of international oil companies and national operators are leading activity in ultra deepwater environments exceeding 1500 metres. These include Petrobras, PETRONAS and TPAO, alongside independents such as Murphy Oil Corporation, APA Corporation and Woodside Energy.
Exploration spending has remained broadly resilient despite cost pressures. Annual investment averaged US$19 billion between 2021 and 2025 across more than 600 wells. Spending in 2025 dipped to US$16 billion across 388 wells, reflecting short term adjustments rather than a structural decline, even as rig day rates nearly doubled.
Joint venture activity continues to play a key role in funding exploration campaigns, with QatarEnergy supporting projects in Brazil, Namibia, Cyprus and the Republic of Congo.
Geographically, ultra deepwater drilling is being concentrated in proven and emerging hotspots following major discoveries by ExxonMobil in Guyana and Eni in Côte d’Ivoire, Indonesia and Cyprus, alongside activity in Brazil and the Black Sea.
Frontier exploration is also expanding into underexplored regions such as Brazil’s Foz do Amazonas basin and extensions of established plays in Angola and Suriname, signalling a broader search for new resource provinces.
Looking ahead, Wood Mackenzie has identified 23 high impact wells for 2026 that could unlock new basins or extend recent super giant discoveries. Among the most closely watched are Petrobras’s Morpho 1 prospect, with an estimated potential of 800 million barrels of oil equivalent, and Equinor’s S M 1378 1 well in Brazil’s Santos Basin, which could confirm the viability of new pre salt play types beyond the Bumerangue discovery.
As upstream players recalibrate portfolios, high impact exploration is expected to remain central to long term supply growth and global energy security.
Author: Bryan Groenendaal
