The Middle East's spending in the offshore oil and gas (O&G) sector is set to increase for at least the next three years from $33 billion in 2023 to $41 billion in 2025, Oslo-based Rystad Energy said in a new report.
For the first time, offshore upstream spending in the region will surpass all others, lifted by mammoth projects in Saudi Arabia, Qatar and the UAE.
The report stated that these countries are tapping into their vast offshore resources to meet rising global oil demand, backed by the necessary capital and infrastructure to outpace other producers.
On the other hand, the global O&G sector will witness the highest growth in a decade in the next two years, with $214 billion of new project investments lined up.
Annual greenfield capital expenditure (capex) broke the $100 billion threshold last year and will break it again this year, the first breach for two straight years since 2012 and 2013.
Offshore activity will likely account for 68 percent of all sanctioned conventional hydrocarbons in 2023 and 2024, up from 40 percent between 2015 and 2018.
In terms of total project count, offshore developments will make up almost half of all sanctioned projects in the next two years, up from just 29 percent from 2015-2018.
These new investments will be a boon for the offshore services market, with supply chain spending to grow 16 percent in 2023 and 2024 , a decade-high year-on-year increase of $21 billion.
Offshore rigs, vessels, subsea and floating production storage and offloading (FPSO) activity are all set to flourish, the report said.
Although the Middle East is leading the way, South America, the UK and Brazil are just slightly behind.
Investments in the North Sea from the UK and Norway will rise in the next two years. UK offshore spending will jump 30 percent this year to $7 billion, while Norwegian investments will hit $21.4 billion, an increase of 22 percent over 2022.
Brazilian upstream spending is projected to approach $23 billion this year, with Guyana investments totaling $7 billion.
In North America, spending on offshore in the US will top $17.5 billion and $7.3 billion in Mexico, the report added.
(Writing by P Deol; Editing by Anoop Menon)