Oil and gas to start 2018 in best shape since downturn, Woodmac says
Published in the company’s 2018 Upstream Outlook today, Wood Mackenzie claims that oil and gas firms are ‘in their best shape since the oil price collapsed’.
The research and consultancy group also said that they believe upstream companies will now focus on showing how well they can adapt and thrive within a low cost environment.
Angus Rodger, Woodmac upstream research director, said the big cuts are behind the sector and that capital expenditure will ‘grow slightly’ in the coming year to a total of $400billion.
Pointing to the fact that $1trillion was lost from company spending as a consequence of the downturn, Mr Rodger is positive about growth within the sector as a result of the rise in global capital expenditure.
He said of the expected increase: “It is all the more impressive given that the LNG cliff has arrived: LNG spend will plummet by US$16 billion – roughly 40% – as major projects in Australia and Russia are completed. The resulting investment gap will be filled by unconventionals and deepwater projects, with spend to rise 15% for both. The growth in deepwater comes after three years of decline, signalling this key resource theme is back on track.”
Written by David McPhee for energyvoice.com