Wednesday, 12 June, 2024 / Edition 11

Hope you enjoyed your weekend. Mine was spent in a Houston bridge tournament, where I had a lot of fun competing against players ages 10 to 80 years old.

Now, time to get to the past week’s top upstream news.

Shangyou Nie

Editor, Well Read

Key Energy Investment Findings and Predictions for 2024

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The International Energy Agency published its “World Energy Investment 2024” report on 6 June. The report states that total energy investment in 2024 will reach $3 trillion, with 2/3 in new energy and 1/3 in fossil fuels.

About the report:

• The IEA has published these annual investment reports since 2015. Each includes a review of the previous year and estimates for the current year.

• The IEA uses six categories to analyze industry investment: fossil fuels and five others under “clean energy” (renewable power, grids and storage, energy efficiency and end-use, nuclear and other clean power, and low-emissions fuels).

Key findings from 2020-2024:

• Total energy investment will grow from $2.1 trillion to $3.1 trillion, with an average annual growth rate of 11.4 percent.

• Clean energy investments will grow from $1.2 trillion to $2 trillion, with an average annual growth rate of 15.2 percent.

• In 2024, China will invest $862 billion in energy, by far the highest in the world. North America ($623 billion), and Europe ($563 billion) are the next closest.

• Only 15 percent of clean energy investments have gone to the “Emerging Market and Developing Economies” (except for China) from 2019–2024.

• Overall, 2/3 of energy investments have come from the private sector; 1/3 has come from government and state-owned enterprises.

Fossil fuel findings:

• Fossil fuel investment growth has averaged 8.4 percent per year from 2020–2024.

• Global oil and gas upstream investment will reach $570 billion this year, up 7 percent over 2023.

• Upstream spend growth from 2017-2024 has come mainly from NOCs from the Middle East and Asia. Majors, other NOCs, and independents have decreased their spend.

• Coal investment continues to rise and is estimated to reach $165 billion in 2024, with an average annual growth rate of 6.3 percent since 2020.

• More than 50 GW of new coal-fired power plants were approved in 2023, the highest amount since 2015. Almost all of them are in China.

New energy investment findings:

• China will be the largest clean energy spender with $675 billion.

• Europe ($370 billion) and the USA ($315 billion) will be the second and third.

• Clean energy investment from oil and gas companies reached $30 billion in 2023, accounting for 4 percent of the industry’s capital spending.

• NOCs spent only $1.5 billion on clean energy in 2023.

• Solar energy is the fastest growing group, reaching $500 billion in 2024.

• Investments in grids and storage have also grown quickly to $450 billion in 2024, led by the USA ($100 billion) and China ($90 billion).

Dive deeper: For more details, read the full 2024 report and previous versions here.

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CNOOC Makes Breakthrough Ultra-Shallow Gas Discovery

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Chinese national oil company CNOOC recently announced it has found an ultra-shallow gas field Lingshui 36-1 in an ultra-deepwater block. The field is located in 1,500m of water.

What’s new

• According to CNOOC, the reservoir is in the Ledong Formation of Quaternary with an average burial depth of 210m.

• The discovery well flowed more than 10 million cubic meters (or 353 million cubic feet) of gas in testing.

• Lingshui 36-1 discovery is located in the western South China Sea, SE of Hainan Island.

• According to Xu Changgui, CNOOC’s deputy exploration manager, developing the shallow gas field will present “world-class” engineering and technical challenges.

CNOOC growth:

• Domestic E&P has been especially encouraged under President Xi as a key to help secure Chinese energy supply. Budgets for Chinese domestic E&P have increased significantly in the past five years.

• CNOOC has an annual E&P budget of $18 billion in 2024, bigger than that of Chevron ($16 billion) for the same year.

• For comparison, Chevron produces about 3.4 million BOE/day, while CNOOC produces about 1.9 million BOE/day.

• CNOOC’s reserve replacement ratio reached 180 percent in 2023, with a five-year average RRR at 161 percent from 2019–2023.

What to watch:

• CNOOC will now eagerly welcome innovative technical solutions to produce the shallow gas discovery.

• Similar ultra-shallow reservoirs might exist in offshore areas around the world.

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.