January 2026 | Carbon Minefields Oil and Gas Exploration Monitor

The new year brought renewed attention to Venezuela’s oil sector, following announcements by the United States regarding potential steps to revive production. Yet Rystad analysts warn that fixing Venezuela's degraded oil infrastructure would require substantial capital, with some estimates suggesting more than USD 50 billion in investment just to maintain current outputs. Returning production to historic highs of 3 million barrels per day would require around USD 12 billion in investment per year over the next 15 years. Much of Venezuela’s remaining production potential lies mostly in heavy crude, which is relatively expensive to extract. For many projects in this category, breakeven prices for new production have been estimated to need a global oil market price above USD 80/barrel (bbl), meaning that sustained higher oil prices may be required for broader investment to be commercially attractive.

Meanwhile, global markets are already expected to be oversupplied in the coming years, and production is set to expand again in 2026, with the United States and Brazil leading the charge. Global average Brent prices are expected to remain low, trading around USD 60/bbl throughout the year. This is in large part due to the Organization of the Petroleum Exporting Countries’ (OPEC+) plans to maintain production levels in order to safeguard its market share. At the same time, record-breaking renewable energy capacity additions continue to change the global energy landscape, contributing to a slowdown in hydrocarbon demand and expectations that global oil demand will peak by 2030.  

Exploration spending is also down, declining 5% last year, and it is expected to remain relatively flat in the year ahead compared to average exploration capital expenditure (CapEx) over the last decade. Exploration efficiency is also deteriorating as the rate of discoveries declines and the finding cost increases. Total exploration activity in 2025 remained well below the peaks of the 2000s. Looking ahead to 2026, these trends signal waning investor confidence and a shifting market with new oil and gas infrastructure carrying economic and geopolitical risks.
 

Monthly Update

New Exploration Licences Awarded 

In December 2025, 21 new oil and gas exploration licences were awarded across six countries. Combustion of these reserves would release 78.0 million tonnes of carbon dioxide (CO2). Egypt topped the list, granting licences to explore blocks containing an estimated 60.2 million bbl of oil and 170.5 billion cubic feet (cf) of gas. If exploited and burned, Egypt’s resources alone would produce 38.6 MtCO2—nearly half of the total emissions embodied in all newly licensed fields. 

Oil and Gas Companies' Exploration Activities 

Companies invested USD 1,459.9 million in CapEx for exploration licences awarded in December 2025. Chevron, Mari Petroleum, and Sichuan Energy Co invested in exploration licences that have the highest embodied emissions—predominantly in Egypt, Pakistan, and China. Meanwhile, Sichuan Energy Co, Zhejiang Zhengkai Group, and Mari Petroleum accounted for the lion’s share of global investment, together sinking USD 785.6 million into their newly granted projects. Mounting scientific evidence, warns that further industry expansion is unnecessary to meet energy demands if the world delivers on climate commitments. 

Rolling Annual Update

Licences Awarded 

In the past 12 months, regulators awarded 684 new oil and gas exploration licences, freeing up resources whose eventual combustion could emit 2,439.0 MtCO2. June 2025 accounted for the largest monthly allocation, with 891.8 MtCO2 of embodied emissions granted in new licences. Notably, the highest volumes were issued by economies with limited capacity to transition away from fossil fuels and low dependence on them. Among these, Brazil topped the list, awarding licences with the greatest potential climate impact.

Note: The embodied carbon emissions from newly awarded licences are presented in four country groups based on the Civil Society Equity Review (2023) categorization. Countries are grouped based on two main axes: 1) their capacity to transition and 2) their dependence on fossil fuels, which provides a rationale to determine how fast they should phase out their domestic production. These indicators are measured based on countries' ability to deal with the costs and disruptions of climate change and historical emissions, as well as an assessment of how much a country’s socio-economic welfare is dependent on extraction. 

Exploration CapEx

In 2025, the oil and gas industry poured USD 30.9 billion into exploration projects, averaging USD 2.6 billion per month. Projects awarded in June 2025 saw the largest share, and ONGC, Shell, and Petrobras alone accounted for USD 6.5 billion of this capital.
 

Outlook

Ongoing and Upcoming Licensing Rounds 

Governments are currently offering 81 oil and gas exploration licences globally. If awarded and fully exploited, these licences risk releasing 16,170.4 MtCO2. Over the next 6 months, 293 exploration blocks are expected to be offered for licensing, with potentially recoverable oil and gas resources linked to an estimated 9,246.2 MtCO2 in emissions. China stands out with 2,335.2 MtCO2 locked in blocks that are planned for offer. This continued expansion of upstream fossil fuel infrastructure risks locking in emissions that far exceed remaining carbon budgets and undermine efforts to transition to sustainable energy sources.

About Carbon Minefields

This newsletter provides monthly updates on global oil and gas expansion, reporting on every new oil and gas field and exploration licence awarded. It also tracks the climate impact of these fields and licences, translating them into total embodied emissions—that is, the amount of carbon dioxide (CO2) released into the atmosphere if the licensed oil and gas is extracted and burned. Finally, monitoring companies’ spending to explore and develop new oil and gas fields provides additional insights into the industry’s expansion activities. Certain data are segmented according to countries’ capacity to transition away from oil and gas.

Halting new fossil fuel projects is a key step in limiting global warming to 1.5°C and transitioning away from fossil fuels, as agreed by 198 countries at the 28th UN Climate Change Conference (COP 28). Research by Green et al. (2024) in Science shows there is more than enough oil and gas in existing fields to meet Paris-aligned energy demand. Accordingly, the Carbon Minefields newsletter monitors efforts to expand oil and gas production beyond already operating fields—flagging misalignment with the Paris Agreement target.

The data above are collected by experts at the International Institute for Sustainable Development; we use AI and programming tools to extract and analyze data from Rystad Energy (2026) before reviewing all content for accuracy and clarity.

This newsletter is produced using data from Rystad Energy (2026) extracted from the UCubeExploration Browser v. 2026-01-13 and published with Rystad’s permission. Embodied emission estimates were calculated by the authors using the IPCC’s emission factors of crude oil, condensate, natural gas liquids, and gas. Data manipulation is automated with Python programming. Most text is generated with OpenAI’s application programming interface using GPT-4o mini. The AI-generated outputs for this edition were produced on January 14, 2026. International Institute for Sustainable Development experts review all AI-generated content for accuracy, clarity, and further interpretation.

For more information regarding the data presented and for national-level disaggregation, please contact us at [email protected] or [email protected].