Insight
How much does the oil and gas industry need to spend?
Report summary
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.
Table of contents
- Upstream spend needs to increase, but not as much as you might think
- Year one of a three-year recovery?
- Cost efficiency, not less activity, is the primary driver of lower spend
- US investment is structurally lower; Qatar will lead the recovery
- LNG and deepwater spend could exceed pre-covid levels by 2023
- NOCs recovering fastest; Majors won’t return to historical levels
- Demand peaks at more than 200 million boe/d in the 2030s
- Annual average of US$400 billion (in 2021 terms) required
- North America, Middle East and Russia/Caspian will remain dominant
- How will US tight oil investment respond to prolonged high oil prices?
- Accelerated Energy Transition scenarios highlight potential downsides
- Substantial investment needed, even in an accelerated energy transition
- Cost inflation could pick up as activity levels rise, increasing absolute spend requirements
Tables and charts
This report includes 13 images and tables including:
What's included
This report contains:
Other reports you may be interested in
Country Report
Liberia upstream summary
Narina remains the only discovery in Liberia The oil and gas industry in Liberia is still in its infancy. Exploration in the 1970s ...
$3,400
Insight
Energy & Commodities Summit 2020 - APAC Virtual Edition
What does the crisis of 2020 mean for the future of energy? The Energy & Commodities Summit APAC discussed challenges and opportunities.
$1,050
Asset Report
UK SGB other fields (sub-commercial)
Data on the fields we classify as sub-commercial is available below. Sub-commercial fields contain discovered resources that are ...
$3,100
