Global exploration and production spending is forecast to reach a record $678 billion this year, a 10% increase over last year, according to a recent global E&P spending update report from Barclays.
In December 2012, Barclays forecast global E&P spending to reach $644 billion in 2013.
“This represents the fourth consecutive year of double-digit worldwide spending gains since the 2009 downturn,” Barclays said.
The increase in global spending is mainly due to planned activities in the Middle East and other parts of Asia.
The improvement in the Middle East is primarily driven by higher spending forecasts for Saudi Arabia’s Saudi Aramco and Iraq. Higher budgets of the Chinese majors are driving the spending growth in the Asia-Pacific region.
E&P spending in North America is now expected to increase by a modest 2%, compared to a flat year-over-year spending forecast in December.
Barclays said the activity recovery in US land is under way, although somewhat uneven and creating a market of “haves” and “have nots” for the oil service providers.
Spending in Latin American is expected to rise by a modest 12% compared to 15% in the December report.
The updated results reinforce Barclays’ positive stance. “We continue to believe the industry is in the early stages of a long, sustained, and powerful global up-cycle with steady spending growth in the international and offshore markets and rebounding activity in North America,” Barclays said.
Contact Conglin Xu at [email protected].