Upstream oil and gas investment to increase 20 percent
A major energy research firm now says investment in oil and gas production will grow by 20 percent to $344.4 billion this year, up from the 8 percent predicted at the start of 2022.
Norwegian firm Rystad Energy said it’s the highest forecasted growth rate since 2008, with investment set to go up 35 percent in shale oil areas like the Permian Basin, and offshore deepwater drilling investment is expected to increase around 30 percent.
However, it’s not investment in the U.S. spearheading the growth.
“Brazil, Guyana, West Africa, and Australia will drive most of this growth,” said Espen Erlingsen, head of upstream research at Rystad, in a brief update. “The higher activity caused by high commodity prices is the main driver of this record-high investment growth.”
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The small country of Guyana in South America, nestled between Venezuela, Brazil, Suriname and the Atlantic Ocean, has experienced rapid growth in its oil and gas activity in recent years.
Earlier this year Houston-based Exxon Mobil said it made three new discoveries in the country for a total of 18 new oil and gas discoveries since 2015. Total production capacity is set to reach 340,000 barrels of oil per day by the end of this year, Exxon said, with more production set to come online within the next few years.
The price of oil is the main reason behind the increased investment, Rystad said. Oil has been trading above $100 per barrel as the global market reacts to Russia’s ongoing war against Ukraine and retaliatory sanctions on Russian oil and gas.
