Discoveries of new oil reserves dropped to the lowest level for more than 60 years, a study conducted by IHS, a research company, has shown. Oil explorers found 2.8bn barrels of crude and related liquids last year. This is the lowest annual volume recorded since at least 1954. The report comes at a time when oil companies keep reducing investments due to low raw materials prices.

Most of the new reserves that have been found are offshore in deep water where these oilfields are hardly accessible and it takes seven years on average to commence extraction there. The less successful rate of newly discovered fields indicates that the supply of raw materials could become inadequate in the next decade.

However, according to Wood Mackenzie, another research company, the lower rate of new dicoveries does not mean that the world is running out of oil. As they recall, the increase in global production in recent years has come from existing fields, not from new ones. But if the rate of oil discoveries does not improve, it will create a shortfall in global supplies of about 4.5m barrels per day by 2035. That could mean higher oil prices, and make the world more reliant on onshore oilfields where the resource base is already known.

The low oil and gas prices since the summer of 2014 have forced deep cuts in spending across the energy industry. Some companies (such as ConocoPhillips) are giving up offshore exploration completely, others (e.g. Chevron) are reducing them significantly. The overal industry’s spending on exploring and acquiring new reserves will drop to about a half this year and is likely to drop again next year, according to Wood Mackenzie. The exploration business is particularly vulnerable to the raw materials prices fall as it does not come with short-time gains.

In spite of the reduction in investments, the total combined volume of oil and gas discovered last year rose slightly, but the proportion of oil from newly discovered fields dropped from about 35 per cent in 2014 to about 23 per cent in 2015. The two largest finds of last year, located off the coast of Egypt, Mauritania and Senegal, both hold mainly gas. It is not certain whether this is a new trend or a once-off aberration. Some in the industry argue that there are still plenty of large new oilfields waiting to be discovered.