Upstream capital spending globally is expected to rise by 10-15 percent to $470 billion in 2023 but will remain below 2015-19 levels, Moody’s Investor Service said in a report.

“We expect the oilfield services (OFS) sector in Europe, Middle East, and Africa (EMEA) to benefit from rising upstream capital spending by global oil producers in 2023, especially in the Middle East, as high oil prices continue to provide incentives to develop and exploit reserves,” the report said.

In addition, large capital spending programmes of the Middle East’s national oil companies (NOCs) will continue to drive the current jackup rig supply-demand imbalance.

The strong operating performance of NOCs in the Gulf Cooperation Council (GCC), underpinned by a solid recovery of oil demand in 2021 and 2022, will continue to support long-term rig renewals led by Saudi Aramco.

“We foresee continued growth in the contracted rig count in the GCC region this year following a jump to 131 rigs in 2022 from 115 in 2021,” Moody’s noted.

Earlier, Oslo-based Rystad Energy said the Middle East’s spending in the offshore oil and gas (O&G) sector will increase for at least the next three years from $33 billion in 2023 to $41 billion in 2025.

(Writing by P Deol; Editing by Anoop Menon)