December 2025 | Carbon Minefields Oil and Gas Exploration Monitor

To end the year differently, this month's newsletter offers a review of lessons learned tracking global expansion trends. Closely following the oil and gas industry's relentless pursuit of increasing its daily production helped us uncover insights into the industry.

Oil and gas companies were awarded an area the size of Türkiye to explore in 2025, the largest acreage granted since the COVID-19 pandemic. The geographic footprint of these licences, the investment committed to exploration, and the potential emissions associated with any future production remain significant. However, exploration activity is far below the peaks of the 2000s, pointing to a structural decline in the sector as climate policies, shifting markets, and technological developments increasingly constrain expectations of long-term oil and gas demand.

Looking at 2025, Egypt tops the table for the highest embodied emissions in newly licensed areas as the country leads a major push to attract foreign investment and boost declining production. It is followed by Brazil, which aims to become the world’s fourth-largest oil producer. The Brazilian National Agency of Petroleum, Natural Gas and Biofuels, linked to the Ministry of Mines and Energy, is responsible for managing a year-round licensing system that enabled a vast new offshore area to be awarded between June and October 2025, including in sensitive areas in the mouth of the Amazon River Basin in the long-contested Block 59.  

Large exporters, such as the United States, Norway, and Russia, are also driving expansion. Just last month, 271 blocks were awarded in Alaska as the Trump administration aims to dramatically expand offshore oil and gas leasing in federal waters, which could also affect California and Florida. Next year, Norway is forecast to reach its highest production level since its historical peak in 2004, before initiating a structural decline due to mature fields. Finally, Russia is expected to continue growing its production over the next 10 years, as it seeks to rely increasingly on Chinese exports to offset the losses related to European gas sales. 

As longstanding alliances fracture and multilateralism appears fragile, governments are placing greater emphasis on energy security. Major emerging economies like China, Egypt, India, and Indonesia are seeking to expand their domestic oil and gas production, as well as renewable energy, to reduce dependence on imports. Along with the United States, Brazil, and Guyana, growth in these countries is shifting the balance of power away from OPEC+ countries. Surpluses instead of shortages are expected to become an increasingly common risk in global markets as decentralized producers operate mostly independently.

Globally, several billion dollars are invested every month to find new reserves of oil and gas in previously unexplored regions. The United States remains firmly at the top of the list of the largest spenders on exploration. However, it is now closely followed by China, which ranked second overall with USD 13 billion spent last year, nearly doubling the amount over the past 10 years. Throughout this year, around USD 63 billion was spent on exploration, which is just a small fraction of the industry’s total yearly expenditure to operate and develop existing fields, last year exceeding USD 1.2 trillion.

Despite these investments in ongoing growth, countries are working to transition away from fossil fuels. Colombia announced the first-ever international fossil fuel phase-out conference, to be co-hosted by the Netherlands in April 2026. The event should bring together groups of highly ambitious countries to discuss key aspects of the energy transition. Additionally, the United Kingdom recently became the world’s largest producer and the latest country to commit to ending new oil and gas exploration licences. As renewables and electrification become increasingly affordable, efficient, and safe, demand for oil and gas is expected to peak. European leaders have made clear that their path to energy security is incompatible with fossil fuels. Furthermore, Pakistan provides another surprising example of how rapidly demand for liquefied natural gas cargoes can collapse amid a solar boom. 

Significantly, at the 30th United Nations Climate Change Conference in Belém, Brazil’s President Lula championed roadmaps to end fossil fuel dependence. Because, as he wrote for The Guardian, “a growth model based on fossil fuels cannot last.” This is a chance for consumers and producers to come together and create the enabling conditions for a managed energy transition in line with domestic capabilities and common responsibilities. A large share of the new fields being opened in Brazil, which are forecast to boost domestic production by 20% by 2030, are vulnerable to stranded asset risks. Despite these plans, mostly undertaken by Brazilian national oil company Petrobras, President Lula launched a domestic process to set out how Brazil will transition away from fossil fuels, including by reinvesting oil and gas revenues in clean energy.

About Carbon Minefields

The monthly key data points in the Carbon Minefields newsletter are a valuable resource for spotting emerging trends in the industry. They help validate strategies, understand shifts on the geopolitical scene, and keep an eye on changing trends in oil and gas companies’ operations. By carefully selecting and presenting data from Rystad databases, we make it easier to understand large amounts of information quickly. Sharing facts about the size of newly licensed reserves and their potential emissions when developed and used promotes transparency and accountability, encouraging stricter regulations to protect our industry and environment. 

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 (IISD); we use AI and programming tools to extract and analyze data from Rystad Energy (2025) before reviewing all content for accuracy and clarity.

This newsletter is produced using data from Rystad Energy (2025) extracted from the UCubeExploration Browser v. 2025-12-04 and published with Rystad’s permission. Embodied emission estimates were calculated by the authors using the Intergovernmental Panel on Climate Change 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 December 12, 2025. 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].