Insight
How much does the oil and gas industry need to spend?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
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
Asset Report
Midland Valley CBM unconventional concept play
A detailed analysis of the Midland Valley CBM unconventional play.
$2,800
Asset Report
Future exploration outlook
Focuses on the near-term exploration outlook until 2028 and the sector’s longer-term prospects to 2050.
$11,000
Country Report
Germany upstream summary
A mature hydrocarbon producer - Germany remains one of the top 10 largest oil and gas producers in Europe. Output is primarily gas and ...
$6,480
