(EnergyAsia, August 28 2012, Tuesday) — Oil and gas companies will invest a record of more than US$1 trillion in exploration and production activities this year, said UK-based consultant GlobalData.
In a new report, the company said exploration and production (E&P) investment spending will rise 13.4% to reach US$1,039 billion compared with last year’s US$916 billion. Most of the new investments will focus on offshore fields in Brazil, the Gulf of Mexico and the Arctic Circle.
Investor confidence in new upstream projects is being driven by the increasing number of oil and gas discoveries — 242 last year — combined with high oil prices and the application of new technologies enabling companies to access deep offshore reserves that were previously technically and financially unviable.
GlobalData expects North America to lead with capex reaching US$254.3 billion, representing a share of 24.5% of the 2012 global total. Thanks to the boom in unconventional oil and gas, North America’s upstream spending will grow by 15.7% to outpace the global average rate of 13.4%.
“The continuing exploitation of shale oil and gas sites and the development of Canadian oil sands are the major drivers for these investments,” said GlobalData.
The Asia-Pacific region will be a close second, investing more than $253 billion while the Middle East and Africa are forecast to spend a total of US$229.6 billion.
The report expects national oil companies (NOCs) including Malaysia’s Petronas, China Petroleum & Chemical Corporation (Sinopec) and Brazil’s Petrobras, to account for approximately half of the world’s total capex, Integrated oil companies (IOCs) and independents will make up the rest.
Over the 2012–2016 period, Petrobras ranks first globally amongst NOCs, while ExxonMobil Corporation is expected to be the leading IOC. The two companies will invest a total US$409 billion over the next four years.