Global exploration and production spending is expected to reach a record $678 billion in 2013, a 10% rise over 2012, according to a recent global E&P spending report from Barclays. This estimate surpasses the firm's December 2012 E&P spending forecast for 2013 of $644 billion.
"This represents the fourth consecutive year of double-digit worldwide spending gains since the 2009 downturn," Barclays said. The increase in spending is largely 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 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 rise by a modest 2% in 2013. Recovery in US land activity also is under way, although somewhat uneven, creating a market of "haves" and "have nots" for the oil-service providers.
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."
