News

Globally, the industry last year found 11.6 billion barrels of oil and gas that it could access via traditional vertical drilling, as opposed to horizontal drilling and hydraulic fracturing. That's 3 billion barrels or 21 percent less than it did in 1994, the next-lowest year on the list.

It's quite worrying that oil volumes have dropped so low,†said WoodMac global exploration research director Julie Wilson. Conventional drilling found enough new gas fields last year to replace what the world consumed, she noted. But it only found 3 billion barrels of oil, or one-tenth of enough to replenish annual usage.

That doesn't necessarily mean the world is going without, however. As conventional finds are dropping, America's shale plays are, in part, replacing them.

WoodMac's report found that the majors discovered about 6 billion barrels of conventional oil last year, and about 4 billion barrels of unconventional shale.

RELATED: Oil discoveries at 70-year low signal supply shortfall ahead

There's no doubt that conventional has had to compete somewhat for funding with unconventional plays,†Wilson said.

In addition, the world's integrated oil companies like Exxon, Chevron, BP and Shell have retooled exploration practices during the ongoing oil price downturn and are poised to emerge from the slump leaner, more efficient and more profitable,†the WoodMac report said.

As companies slashed exploration budgets, they stopped pursuing high-cost, high-risk exploration strategies,†Andrew Latham, WoodMac's vice president of exploration research, said in the report. He called such work elephant hunting in the Arctic.â€

The big integrating majors are now choosing only their best prospects for drilling, including more wells close to existing fields, Latham said.

The majors invested $169 billion in exploration from 2006 to 2015 and added 72 billion barrels of oil and gas to their reserves. Fracking made up one-third of that, or 25 billion barrels.

There has been a shift in ambition,†Latham said. The majors, once reliant on major finds, are now looking to acquisitions, existing wells and U.S. shale to replace production.