Total global spending on the upstream oil and gas industry will reach US$1.23 trillion in 2012 and is expected to rise to $1.64 trillion in 2016, with the Middle East region playing a key role in terms of total spending, according to energy consultant IHS
The quarterly IHS upstream spending report said that capital expenditure (capex) on new projects and operating expenditure (opex) on existing plays are expected to hit new records of $728 billion and $500 billion in 2012, respectively.
“The brief lull in expenditures in 2009 and 2010 caused by the Great Recession is behind us,” said David Hobbs, chief energy strategist at IHS.
“Robust oil prices and the growth of North American unconventional gas will create new high water marks for investment in capex and opex that surpass pre-recession highs.”
The report also highlighted the importance of new technologies and high crude prices in supporting a rise in spending.
North America will invest the most out of any region with total upstream expenditure reaching $392 billion in 2012 and IHS predicted that this will increase to $528 billion in 2016, as North America will continue to invest in unconventional resources.
Asia-Pacific is expected to be the second major recipient of energy investments this year and will spend $238 billion in total on the oil and gas sector.
The Middle East is forecast to spend $133 billion in 2012 and is expected to be one of the main growth regions in terms of total spending going forward, with capital expenditure set to rise by nearly 80 per cent from 2011 to 2016, driven by increased drilling activities in Saudi Arabia and Iraq.
