Oil companies’ E&P investment could rise by up to 8% in 2014
BY TARA PATEL
PARIS (Bloomberg) -- Investment by oil and gas companies in exploration and production may rise as much as 8 percent next year as they seek to add reserves and expand output from Norway to Australia, the IFP Energies Nouvelles policy group said.
Spending may climb to $750 billion in 2014 from an estimated $694 billion this year, the Rueil-Malmaison, France- based IFP said today in a report. Since the start of this year, 177 oil and gas discoveries have been made, it said.
Companies are stepping up the search for oil after prices gained on rising demand. The quarterly average price for Brent crude, an international benchmark, has remained above $100 a barrel since the start of 2011, according to data compiled by Bloomberg. That’s in part countered by an increase in expenses.
Exploration and production investment “will continue to grow but at a slower pace,” IFP president Olivier Appert told reporters in Paris. “There is some tension in oil services due to higher costs.”
IFP expects the market for seismic equipment and oilfield surveys to grow at about 8 percent next year compared with an estimated 12 percent in 2013. Investment in refining will be about $71 billion compared with $70 billion this year, with overcapacity projected to rise to 4 million barrels a day by 2020 from about 2.6 million barrels a day this year.
A “strong increase” in refinery upgrades in the Americas and eastern Europe is fueling investment, as well as new projects in Asia, in contrast to western Europe and Africa, according to the think-tank.