INDUSTRY players are expected to spend heavily on exploration this year with North America emerging as the area with the greatest opportunities in 2012, according to a new report.
Nearly two thirds (63 per cent) of oil and gas executives plan to invest either somewhat or substantially more over the next year, in contrast to 49 per cent in 2011, GL Noble Denton and the Economist Intelligence Unit said in its latest forecast Big Spenders: The outlook for the oil and gas industry in 2012.
“Companies are preparing to spend big in 2012, despite a slower growth in demand for oil and gas during the second half of last year, and concerns over the future of the global economy,” said Pekka Paasivaara, member of the GL Executive Board.
Eighty-two per cent of the 185 board-level directors and industry policy makers surveyed for the report are either highly or somewhat confident about the business outlook for their company, compared with 76 per cent last year.
The report also found implications of Arab spring, the regional economic shift, and the acute skills shortage.
Just 8 per cent of those polled described themselves as pessimistic over performance in 2012.
However, the report warned that if global economic conditions deteriorate, oil and gas companies will have to scale back their spending commitments where they can do so without creating damage to their wider portfolios.
“While capital expenditure looks set to take off, industry leaders will need to invest selectively this year, keeping operating risks low during a period of prolonged uncertainty,” said Paasivaara.
“Their success will be defined by an ability to develop innovative approaches to operating more safely, efficiently and sustainably than ever.”
Oil News | International
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