Global oil and gas investments witnessed a major boom, during the years 2022 and 2023, to enhance the security of supplies, due to the repercussions of the Russian-Ukrainian war that has not subsided since its outbreak in February 2022.
Recent data issued by the energy research company, Rystad Energy, showed an increase in expected investments in the global oil and gas sector by $140 billion during the years 2022 and 2023.
Before the war, Rystad Energy predicted that global investments in oil and gas would reach a total of $945 billion during the years 2022 and 2023, according to what was monitored by the Energy Research Unit.
Investments rose to 1.1 trillion dollars
The Ukrainian war confounded the calculations of Europeans and international and national oil and gas companies that were caught in the dilemma of partially sacrificing emissions reduction targets in favor of maintaining security of energy supplies in turbulent global conditions.
Before the outbreak of the Russian-Ukrainian war, world investments in oil and gas were expected to reach $470 billion in 2022, before rising to $475 billion this year.
The Rystad Energy report monitored the rise in oil and gas investments globally after the outbreak of the Ukrainian war to a total of $1.1 trillion during 2022 and 2023, an increase of $140 billion from pre-war estimates.
In the same context, the estimates of the International Energy Forum indicated that oil and gas investments around the world increased by 39% over the past year, to reach $499 billion, calling for an increase to $640 billion by 2030, to ensure security of supplies.
The following graphic, prepared by the Energy Research Unit, shows global oil and gas investments until 2030:
Shale oil attracts $80 billion
Shale oil production has attracted most of the additional global investments in the oil and gas sector over the past two years.
Shale oil production attracted more than 70% of additional global investment in 2020 and 2023, equivalent to $80 billion.
And global investments in this sector increased with the increase in drilling and exploration activity by 30%, and the prices of oil field services jumped by about 50%, with supply chain disruptions and the acceleration of global inflation.
-On the other hand, oil and gas production projects from offshore fields accounted for $40 billion, while onshore activities accounted for $20 billion of the investments allocated for the years 2022 and 2023.
-The boom is temporary and not guaranteed
Rystad Energy warned investors and international and national oil and gas companies against relying on the increase in global investments in the sector since last year, as a temporary boom linked to exceptional circumstances that will not last for long.
The research firm expects global investments in fossil fuels to decline within a few years, based on estimates of an increase in alternative investments in renewable energy projects.
Rystad Energy advises field service companies to take advantage of the boom in oil and gas investments during the next few years, while keeping an eye open to the future, which indicates that the green energy revolution is inevitable, as she put it.
The research company senses a huge wave of global investments in renewable energy sources and related technologies until 2030, especially after the United States announced the largest package of tax breaks in its history in favor of clean energy projects.
In August 2022, US President Joe Biden approved the inflation reduction law, which included an attractive stimulus package amounting to $370 billion to support the deployment of renewable energy technologies in the country by 2030.
And European companies began to migrate to the United States since last year, as part of the competition to reserve the largest possible number of lucrative future seats guaranteed by the largest economy in the world.
This is why Rystad Energy advises oil service companies to balance and adapt to take advantage of the rising green current globally, in parallel with evaluating current oil and gas offers.
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