Global O&G upstream spend to rise 68% this year

There is an improvement in rid demand in the Southeast Asian region for oil and gas while global upstream spend to rise 68% this year.

Westwood Global Energy Group’s Global Offshore Rig Market Report indicated that offshore investment bounced back in 2021 and recovered to pre-pandemic levels, which augurs well for the offshore drilling industry.

Engineering, procurement, and construction (EPC) spend surged 200% YoY to US$41.7bil in 2021, with the last quarter recording US$8bil.

The energy consultant projected that 2022 could accelerate further by 68% YoY to US$70bil, the highest since 2013, with annual EPC spend from 2022–25 averaging at US$57bil annually.

Global jackup fleet utilisation showed a small but steady climb throughout 2021, from 76% marketed utilisation in 1Q2021 to 81% in 4Q2021. Global semi-submersible rig utilisation had rebounded until the last few months of 2021.

Omicron again

2022–2032 oil price projection is US$70–75/barrel for now with Brent crude oil prices rising over US$90/barrel on receding worries that the Omicron variant pandemic could significantly dampen global demand. 

“We retain our OVERWEIGHT call as improved crude oil prices and rising global demand will catalyse faster order flows across the value chain. We continue to like Hibiscus Petroleum’s direct upstream exposure to higher crude prices and Dialog Group’s expanding, yet resilient non-cyclical tank terminal and maintenance-based earnings base,” says AmBank Research.