International Energy Agency Executive Director Fatih Birol speaks at a news conference on the sidelines of G-20 Energy Ministers Meeting in Istanbul.

Global oil investments this year are on track to drop by 20 percent, marking their biggest decline in history, Fatih Birol, head of the International Energy Agency, said.

A halving in oil prices in the past year has hit energy companies’ revenue and is discouraging them from spending on both exploration and production.

“We expect this year, in 2015, global oil investments to be 20 percent less than 2014,” Birol told a news conference at a G-20 Energy Ministers’ meeting in Istanbul.

“This is the biggest decline in oil history.”

With oil at below $50 per barrel, this has hit investment plans at major oil firms, national oil companies and independents which have had to find ways to conserve cash.

Cutting investment now will delay upgrades at existing fields as well as frontier exploration, meaning output could slow for years to come.

Some analysts predict a recovery for oil and gas where prices drop and stay low for years before rising. Research firm Morningstar told clients last week it anticipates oil markets fully rebalancing in 2017 at the earliest.

Renewable energy will become the largest single source of electricity over the next five years, the IEA said in a report.

The report stated that the renewables are increasingly becoming affordable, enhancing the energy security and mitigating climate change, and set to dominate the growing systems of the world.

The IEA’s annual Medium-Term Renewable Energy Market Report came as the Group 20 (G-20) energy and natural resources ministers were wrapping up a two-day meeting, the first of its kind for the group of 20 major economies.

Birol meanwhile urged the Chinese government to take over the renewable energy issue next year when Beijing assumes the G-20 presidency.

Birol noted that China is taking major moves over renewable energy and the world needs its experience and investment.

According to the IEA report, 40 percent of the new renewable power plants in the world comes from China, producing hydropower, solar and wind energies.

“In 2014 the renewable energy investment in China was bigger than the investments in the US plus all European countries all put together,” Birol said at a press conference.

He urged China to make more investment in energy-hungry Africa and beyond Asia.

China has a huge experience to share with Africa and Asia as the country has brought electricity to half billion of people in a period of 10 years, he said.

“It is the biggest achievement in the history of energy,” he stressed.

IEA officials also called for world governments to reduce policy uncertainties on renewable energy, saying they are acting like brakes on greater deployment.

“Governments must remove the question marks over renewables if these technologies are to achieve their full potential and put our energy system on a more secure, sustainable path,” Birol said.

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