Posted on 12/05/2011 4:18:10 PM PST by Recon Dad
Energy companies plan to spend a record $598 billion on exploration and production of oil and natural gas worldwide in 2012, growing 10 percent over this year, according to a forecast released Monday by Barclays Capital analysts.
In a survey of about 350 energy companies, the investment bank found that oil and gas exploration and production will continue to expand rapidly in 2012. At nearly $600 billion, the energy industry’s global E&P spending is about equal to the annual gross domestic product of crude oil powerhouse Saudi Arabia.
ExxonMobil remains the biggest spender at more than $30 billion, expanding 5 percent for 2012, according to Barclays.
The industry has been growing E&P expenditures annually, but the rate of growth will slow next year, especially in North America, the report noted. After a surge in activity fueled by a rush to shale-derived natural gas, the availability of rigs and oil field equipment is slowing that expansion, analysts said.
E&P spending in North America grew 31 percent in 2011, but will rise just 8 percent in 2012, Barclays reported.
Internationally, E&P expenditures grew 20 percent this year and are slated to grow 11 percent next year.
Latin American companies will boost expenditures significantly, growing 21 percent in 2012, according to the report. Both Mexico’s state-owned oil company Pemex and Brazil’s national corporation Petrobras are rapidly expanding offshore drilling.
Barclay’s noted that spending could be even higher than forecasted, since energy companies are basing budgets on conservative oil prices and fears about the world economy’s health.
Surveyed companies assumed West Texas Intermediate-priced crude will average $87 per barrel and Brent-priced crude will average $98. Both prices are currently above $100.
About 60 percent of surveyed companies said they would increase spending if the average WTI price in 2012 rises above $100 per barrel. If the average falls below $70, more than two-thirds said they would cut spending.
Faster federal approval of offshore drilling permits, which slowed after last year’s oil spill in the Gulf of Mexico, could also increase domestic spending, the report said.
simone.sebastian@chron.com
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