How much does the oil and gas industry need to spend?
Is the industry under-investing? In the very near-term, yes. But probably by less than many may think. Upstream development investment is on track to recover to US$430 billion by 2023 (in 2021 terms). If it does, supply will meet our near-term demand outlook. Longer-term, upstream capital requirements depend on expected demand and achievable capital efficiency. An average of US$400 billion per year (in 2021 terms) is required out to 2050, to meet our long-term demand forecast. Capital efficiency has been transformed since 2014; spending does not need to return to historic levels to meet our base case demand forecast. Capital efficiency and demand are the key variables, with both having a substantial impact on defining capital requirements.