The escalating depletion of reserves and record-low exploration investments worldwide are increasing the likelihood of a medium-term supply deficit.

This is according to Paal Kibsgaard, CEO of Schlumberger Ltd. (NYSE: SLB), who gave an updated outlook on the global oil market during the company’s latest earnings call.

“In particular, the market continues to focus on headline decline numbers that suggest that production is holding up well, while a closer examination of the underlying data clearly shows that the rate of depletion of proved and developed reserves are rapidly accelerating in several key non-OPEC countries,” Kibsgaard said.

The words were delivered as the industry rebounds from a budget-crushing, oversupply-driven downturn, which prompted oil and gas companies to stall large projects offshore, leave some onshore wells uncompleted and cut back spending everywhere. Although spending in some parts of the world is beginning to increase—as commodity prices stabilize and production cuts by OPEC and some non-OPEC nations improve market conditions—more may be needed to stave off problems later.

“The current level of underinvestment is most visible in exploration where the record-low investment, including both drilling and seismic, led a total amount of industry discoveries of less than 5 billion barrels in 2016 vs. a produced volume of over 30 billion barrels, dropping the industrywide reserves-to-replacement ratio to 32%,” Kibsgaard said.

He saw no clear signs of a significant ramp-up in exploration spending worldwide.

But overall investment is expected in increase in some parts of the world.

“The recovery will clearly be led by North America land, where investment levels are expected to increase by 50% in 2017, leading to a strong increase in activity and an overdue correction to service and product pricing,” Kibsgaard said.

The increased spending has the potential to improve proved oil reserve levels in the U.S., which dropped about 12% from 39.9 billion barrels (Bbbl) to 35.2 Bbbl between year-end 2014 and year-end 2015, according to the U.S. Energy Information Administration (EIA). Proved natural gas reserves also fell—by more than 16% to 324.3 trillion cubic feet (Tcf). Updated figures are scheduled to be released in December 2017.

RELATED: EIA: US Oil, Gas Reserves Fall, Downward Revisions In Forecast

In a note last week, Cowen & Co. analysts said its capex tracking showed 57 E&P companies planned to increase spending in the U.S. by an average of 50% in 2017 over 2016, Reuters reported. This would follow an estimated 48% drop in 2016 and a 34% decline in 2015, Cowen said according to the 64 E&P companies it tracks.

In terms of exploration, Kibsgaard pointed out that Schlumberger has seen more interest for the multiclient surveys it has acquired offshore Mexico in the past two years. Companies across the world have been enticed to take a shot at developing some of the 9.7 Bbbl of proved oil reserves and 15.3 Tcf of proved gas reserves based on data from the EIA.

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Schlumberger’s Campeche 3-D wide-azimuth broadband imaging project covered 71,000 sq km across deepwater Mexico, while its Campeche reimaging program combined 80,000 sq km of narrow-azimuth surveys in the basin. In addition, the company’s reimaging program in the Perdido area tied the U.S. Gulf of Mexico’s Alaminos Canyon protraction area to the offshore Mexico Perdido area by incorporating 36,000 sq km of reimaged data.

During the earnings call, Kibsgaard also said “investment levels in the Middle East and Russia are also expected to remain resilient this year.”

“However, for the rest of the world, which still makes up more than 50 million barrels per day of oil production, we are headed toward a third year of significant underinvestment, which increases the likelihood of a medium-term supply deficit as produced reserves are not replaced in sufficient volume.”

Velda Addison can be reached at vaddison@hartenergy.com.