Title : CAPEX Falling Short? -- Wood Mackenzie -- December 17, 2018
link : CAPEX Falling Short? -- Wood Mackenzie -- December 17, 2018
CAPEX Falling Short? -- Wood Mackenzie -- December 17, 2018
Don sent me the link. Thank you. I would have missed this story. I find the data points in this article absolutely fascinating.The number of new oil and gas projects will rise five-fold next year from a 2015 trough but overall spending is still unlikely to be enough to meet future demand, consultancy Wood Mackenzie said.
Shaken by a sharp drop in oil prices in recent months, boards are generally expected to stick to spending discipline imposed following the 2014 price crash.
Global investment in oil and gas production, known as upstream, is expected to reach around $425 billion next year.
That compares with a total spending of $770 billion in 2014, which dropped to $400 billion in 2016 and 2017.
I think folks have been saying this for the past ten years -- that CAPEX would not meet future demands. I'm curious how far out Wood Mackenzie is looking. Certainly, there is no suggestion that supply won't meet demand for the next ten years?Although spending levels have slightly recovered since then, next year's capital expenditure will still fall short of the $600 billion required to meet demand growth and to offset the natural decline of output from field.
Disclaimer: I am inappropriately exuberant about the US shale revolution.
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