Oil upstream spending to top $380bn this year
Singapore, November 11, 2010
Investment in oil exploration and production worldwide will increase this year to $380 billion, but may only return to 2008 record levels in two years time at the earliest, consultants Wood Mackenzie said on Thursday.
Spending in 2010 will be $19 billion higher than last year, WoodMac says, but will remain 10 percent behind 2008 levels, Iain Brown, WoodMac's regional upstream research manager, said in a statement.
'Many plans have been restored or expanded, in the expectation that demand and commodity prices will remain relatively robust over the longer term,' Brown said.
'Confidence has returned to many regions and sectors of the industry, although this effect is far from consistent across the world.'
US non-conventional hydrocarbons, particularly shale gas, are leading the recovery, aided by horizontal drilling in the Gulf coast and new projects in Australia and Iraq. The Middle Eastern producer will invest $10 billion in the next three years.
But spending is lagging in Russia and Canada, where it may not return to 2008 levels until the end of this decade, WoodMac said.
BP's spill of more than 4 million barrels of crude oil into the seas off the US Gulf coast earlier this year led to a moratorium on offshore drilling in US waters and new regulations aimed at permanently reshaping the US offshore oil and gas industry, which industry officials have said will raise costs and could reduce offshore output. -Reuters