Upstream gas, LNG to drive global O&G investments to US$628b in 2022, says Rystad
Global oil and gas (O&G) investments will expand by US$26 billion (RM108.68 billion) this year as the industry continues its protracted recovery from the worst of the pandemic and the hurdles imposed by the Omicron variant. According to Norway-based independent energy research and business intelligence company Rystad Energy, overall O&G investments will rise 4% to US$628 billion this year from US$602 billion in 2021. In a statement Tuesday (Jan 11), the firm said a significant factor behind the increase is a 14% increase in upstream gas and liquefied natural gas (LNG) investments.
It said these segments will be the fastest-growing this year, with a jump in investments from US$131 billion in 2021 to around US$149 billion in 2022.
It said although this falls short of pre-pandemic totals, investments in the sector are expected to surpass 2019 levels of US$168 billion in just two years, reaching US$171 billion in 2024.
Rystad said upstream oil investments are projected to rise from US$287 billion in 2021 to US$307 billion this year, a 7% increase, while midstream and downstream investments will fall by 6.7% to US$172 billion this year.
Rystad head of energy service research Audun Martinsen said the pervasive spread of the Omicron variant will inevitably lead to restrictions on movement in the first quarter of 2022, capping energy demand and recovery in the major crude-consuming sectors of road transport and aviation.
“But despite the ongoing disruptions caused by Covid-19, the outlook for the global oil and gas market is promising,” he said.
Rystad said global shale investments are forecasted to surge 18% in 2022, reaching US$102 billion in 2022 compared with US$86 billion in 2021.
It said offshore investments are set to increase 7% (from US$145 billion to US$155 billion) while conventional onshore will jump 8% (from US$261 billion to US$290 billion).
Regionally, it said Australia and the Middle East stand out, with the former likely to see a jump in investments of 33%, thanks to greenfield gas developments.
In the Middle East, investments will rise by an anticipated 22% this year as Saudi Arabia boosts its oil export capacity and Qatar expands production and export capacity of LNG, it said.