(EnergyAsia, December 31 2012, Monday) — Global expenditure on oil and gas exploration and production (E&P) is expected to reach a record US$1,039 billion for 2012, said natural resources consultant GlobalData.

In a recent report, the UK-based firm predicts that the sector’s capital expenditure will increase by 13.4% over 2011’s US $916 billion as oil companies intensify their search for reserves and increase production in offshore Brazil, the Gulf of Mexico, Africa and the Arctic Circle.

Investor confidence in new upstream projects is being driven by the increasing number of oil and gas discoveries, combined with consistently high oil prices and the arrival of new technologies that are giving the major firms access to deep offshore reserves that were previously technically and financially unviable.

North America will emerge as the leader, receiving investment worth US$254.3 billion, representing a share of 24.5% of the 2012 global total. Investors will continue to focus on the region’s unconventional oil and gas reserves such as shale oil and gas, and Canada’s oil sands.

GlobalData predicts Asia-Pacific region will be a close second, attracting US$253.1 billion in capital expenditure while the Middle East and Africa are forecast to take in a total of US$229.6 billion.

National oil companies (NOCs) will take the lead, contributing approximately half of the world’s upstream investment. Integrated oil companies and independents will make up the rest.

Another consulting group, GBI Research, said companies will venture further into deeper waters as they deplete reserves in shallow water acreages and are not making many new discoveries.

In a recent report, the New York-based firm named the deepwater areas off Brazil, West Africa, Angola, Australia, the Krishna Godavari basin off eastern India, and the US Gulf of Mexico as the hotbeds of offshore investment.