Oil and gas investments have been projected to expand by $26 billion this year on the back of new upstream gas and Liquefied Natural Gas (LNG) investments, energy research firm Rystad Energy has said.
Overall oil and gas investments will rise by 4 percent to $628 billion this year from $602 billion in 2021 as the industry continues its protracted recovery from the worst of the pandemic and the hurdles imposed by the Omicron variant, it said.
In addition, it is also projected that these segments will be the fastest-growing in the current year, with a jump in investments from $131 billion in 2021 to around $149 billion in 2022.
However, with the falls short of pre-pandemic totals, investments in the sector are expected to surpass 2019 levels of $168 billion in just two years, reaching $171 billion in 2024, the report noted.
Speaking on this development, Audun Martinsen, head of energy service research at Rystad Energy, 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.”
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According to Rystad Energy, upstream oil investments are expected to rise from $287 billion in 2021 to $307 billion this year which will represent a 7 percent increase, while midstream and downstream investments will fall by 6.7 percent to $172 billion this year.
While sanctioning activity in North America is expected to pick up, with over $40 billion in projects scheduled for approval in 2022. Six LNG projects, five in the United States and one in Canada, are expected to be approved, according to the report.
In the same vein, the report also noted that Africa in 2022 is expected to be another quiet year, with projects worth a comparatively small $5 billion expected to be sanctioned.
According to the report, when it comes to offshore field sanctioning, the global approvals pipeline for 2022 contains approximately 80 projects worth a total of $85 billion. Ten of these are floating production, storage, and offloading (FPSO) units, 45 are subsea tiebacks, and 35 are grounded platforms.
Rystad analysis also showed that Latin America and Europe will account for roughly 24 percent of total offshore sanctioning values next year, with deep water expansions expected in Guyana, Brazil, and Norway as a result of recent tax changes.
