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Global Oil, Gas Spending Hits $1.1Tn in 2022/23
Global oil and gas spending for 2022 and 2023 has been revised upwards, with investments expected to reach $1.1 trillion, mainly due to energy security concerns over supply problems stemming from the war between Russia and Ukraine, according to energy market intelligence firm Rystad Energy.
Before the Russo-Ukrainian war, Rystad Energy predicted that world oil and gas investments would reach $945 billion within two years.
However, as the war led to high energy prices and shortages, the world market intensified the implementation of projects to meet peak demand.
Therefore, the research firm anticipates an additional $140 billion in oil and gas investments over the two years.
Audun Martinsen, Head of Supply Chain Research at Rystad Energy, said that “Gaining control of the supply chain is crucial for countries and regions to become less dependent on global value chains.”
Of the $140 billion in additional investments made in oil and gas, thus far, $80 billion has been directed towards shale production – activities across the industry rose by 30% – while offshore production accounted for $40 billion and onshore activities $20 billion driven by a surge in upstream investments and the increased demand for rigs, producing wells and greenfield sanctioning in 2022.
As the upstream market expanded in 2022, oilfield service prices increased by 50%, a development that has created opportunities for service companies to capitalize on increased oil and gas spending.
“Service companies should make the most of this upturn now while keeping one eye firmly on the future.
The energy transition is not slowing down; huge waves of investments in renewables and clean tech are on the horizon.Audun Martinsen, Head of Supply Chain Research at Rystad Energy
“So, to ensure their long-term success, service companies should adapt their offerings now to capitalize fully on the inevitable green revolution,” reiterated Martisen.