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A report by Norway-based energy research company,Rystad Energy,says global oil and gas investments will increase more than 4.3 per cent annually to reach $628 billion this year as the industry recovers from the pandemic and the challenges posed by the Omicron variant.
The report said the increase in investment will largely be driven by a 14 per cent year-on-year rise in upstream gas and liquefied natural gas investments in 2022, the independent energy research and data analytics company said.
According to the report,upstream gas and liquefied natural gas will be the fastest-growing segment this year, with investments rising to nearly $149bn, from $131bn in 2021.
This falls short of the pre-pandemic total but investment in the sector is expected to surpass the 2019 levels of $168bn in two years, reaching $171bn in 2024, Rystad said.
Upstream oil investments are projected to rise 7 per cent yearly to $307bn in 2022. However, the midstream and downstream investments will fall 6.7 per cent on annual basis to $172bn this year.
Rystad Energy’s head of energy service research, Audun Martinsen, 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.
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He added:“But despite the ongoing disruptions caused by [the] Covid-19, the outlook for the global oil and gas market is promising”.
Global shale investments are predicted to surge 18 per cent to reach $102bn this year, almost $16bn more than last year, Rystad said.
The offshore investments are set to reach $155bn, up 7 per cent annually, while conventional onshore will jump 8 per cent to $290bn this year, it said.
This year’s investment growth is very much “pre-programmed” by the $150bn worth of greenfield projects sanctioned last year, up from $80bn in 2020, Rystad said.
Approving activity in 2022 is likely to mirror last year’s levels, with a similar amount of project spending to be unleashed in the short to medium term, it said.
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