• 3 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 19 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 51 mins WTI @ $75.75, headed for $64 - 67
  • 52 mins EU to Splash Billions on Battery Factories
  • 3 hours US top CEO's are spending their own money on the midterm elections
  • 17 mins The Dirt on Clean Electric Cars
  • 11 hours Petrol versus EV
  • 5 hours OPEC Is Struggling To Deliver On Increased Output Pledge
  • 6 mins Satellite Moons to Replace Streetlamps?!
  • 3 hours The Balkans Are Coming Apart at the Seams Again
  • 8 hours 10 Incredible Facts about U.S. LNG
  • 48 mins Uber IPO Proposals Value Company at $120 Billion
  • 16 hours E-mopeds
  • 3 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 6 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 1 day These are the world’s most competitive economies: US No. 1
Alt Text

Oil Price Rally Boosts Electric Car Sales

While $100 oil is believed…

Alt Text

Elon Musk Plans First Commercial Flights To Mars

Despite the headwinds he faced…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Trending Discussions

IEA: Global Energy Investment Drops 12 Percent

Energy

Energy investments worldwide fell by 12 percent on the year to just over US$1.7 trillion in 2016, with electricity investment outpacing oil and gas spending for the first time ever, the International Energy Agency (IEA) said in its World Energy Investment 2017 report on Tuesday.

Still, oil and gas accounted for two-fifths of global energy supply investment, despite a 38-percent drop in capital spending in that sector between 2014 and 2016, the IEA noted.

Following a 44-percent plunge in the period 2014-2016, upstream oil and gas investment is set to rebound modestly this year, according to the IEA. Investment in U.S. shale is set to rise by 53 percent and resilient spending in the big producing regions the Middle East and Russia are expected to push upstream investment to increase by 3 percent this year. Rising investments in Mexico after a very successful offshore bid round will also contribute to higher upstream spending, the IEA said.

In terms of upstream capital costs, trends are diverging regionally. Worldwide, costs are dropping this year for a third consecutive year due to deflation in the offshore segment, but at a 3 percent decline it is much slower than the drops seen in 2015 and 2016. In the U.S., however, the “rapid ramp up of U.S. shale activities has triggered an increase of costs of 16 percent in 2017 after having almost halved in 2015-16,” the IEA said.

“The oil and gas industry is undertaking a major transformation in the way it operates, with an increased focus on activities delivering paybacks in a shorter period of time and the sanctioning of simplified and streamlined projects,” according to the international agency.

As far as oil and gas companies’ financial health is concerned, the IEA has estimated that “despite investment cutbacks and better cost discipline, the oil majors increased debt by over $100 billion between late 2014 and early 2017.” Independent U.S. drillers, on the other hand, have improved finances with efficiency gains and greater availability and cost of bond financing after oil prices rallied from the early-2016 lows. Related: Trump’s First Step To Boost Gulf Of Mexico Drilling

Despite projections for a slight increase in investment this year, the IEA reiterated a warning that falling investments point to future energy security risks.

“A drop in upstream oil and gas activity and the recent slowdown in the sanctioning of conventional oil fields to its lowest level in more than 70 years may lead to tighter supply in the near future,” the agency said.

“Given depletion of existing fields, the pace of investment in conventional fields will need to rise to avoid a supply squeeze, even on optimistic assumptions about technology and the impact of climate policies on oil demand. The energy transition has barely begun in several key sectors, such as transport and industry, which will continue to rely heavily on oil, gas and coal for the foreseeable future,” the IEA noted.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News