BarCap: E&P spending to hit record in 2012

Worldwide upstream oil and gas spending in 2012 will climb by 10% to reach $598 billion, according to a recent outlook by Barclays Capital.

BarCap surveyed 350 oil and gas companies worldwide for the report and found that although companies seem to be conservative in their price estimates, higher oil prices are driving the projected spending increase.

In aggregate, oil and gas companies are basing 2012 capital spending budgets on an average oil price of $87/bbl for West Texas Intermediate crude oil and $98/bbl for Brent crude. This compares with current WTI and Brent prices of $101/bbl and $110/bbl, respectively, indicating that oil and gas companies are likely taking a conservative view on oil prices given the uncertain economic environment, BarCap said.

“We believe the majority of companies have taken a conservative approach in setting their initial 2012 budgets, and current oil prices levels, if sustained, would suggest that there is considerable upside to our current forecasts as we move throughout the year. By region, exploration and production spending is expected to rise most meaningfully in Latin America, Africa, Europe, the Middle East, and Russia,” the report said.

Recent exploration success in various regions of the world confirms that exploration is likely to be at the forefront of spending growth in 2012, BarCap said.

In North America, E&P expenditures are expected to increase by 8% from 2011 outlays. Elsewhere, spending is forecast to grow by 11% from this year.

Capital spending is forecast to climb by 21% in Latin America, driven by an increase by Petroleos Mexicanos, an aggressive capital program for Ecopetrol in Colombia, and Petroleo Brasileiro SA’s continued deployment capital in support of its multiyear presalt development plan.

Spending in Africa also is projected to rise by 14%, as civil unrest and political disruptions in North Africa and other areas abate.

In Russia, OAO Lukoil is expected to be particularly aggressive over the next several years and the company recently announced plans to invest $48 billion through 2014 to increase production, including $14 billion to be spent in 2012, the report said.

Contact Marilyn Radler at marilynr@ogjonline.com.

Related Articles

Judge bars Anadarko e-mails as evidence in Macondo blowout hearing

03/21/2014 A federal district judge in New Orleans refused to accept e-mails between Anadarko Petroleum Corp. and BP PLC as evidence in a hearing to determine...

Industry group welcomes most UK budget moves

03/21/2014 Oil & Gas UK voiced support for all but one of several measures affecting the offshore producing industry announced in the UK government’s annu...

MARKET WATCH: Crude oil, gas futures prices slide entering spring

03/21/2014

The first day of spring in the northern hemisphere was marked by lower crude oil and natural gas futures prices.

OMV acquires West of Shetland licenses from Hess

03/21/2014 OMV AG has reached an agreement with Hess Corp. to acquire four licenses in West of Shetland, UK, including Cambo field and the Blackrock prospect,...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected