Global oil and gas spending for 2022 and 2023 has been revised upwards, with investment set to hit $1.1 trillion driven largely by energy security concerns following supply challenges caused by the Russian-Ukraine war, according to energy market intelligence firm Rystad Energy.
Prior to the Russian-Ukraine war, Rystad Energy predicted global investments in oil and gas to hit $945 billion for the two year period, however, with the war causing high energy prices and shortages, the global market has intensified project deployment to meet the spike in demand.
As such, the research firm anticipates $140 billion in additional oil and gas investments to be made during the two years.
Audun Martinsen, Head of Supply Chain Research at Rystad Energy, stated 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, prices for oilfield services rose by 50%, a development which has created opportunities for services companies to profit from the increase in 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. So, to ensure their long-term success, service companies should adapt their offerings now to capitalize fully on the inevitable green revolution,” reiterated Martisen.