Exploration and production (E&P) spending worldwide now is on pace to accelerate 20% this year because of higher oil and natural gas prices, according to a survey of producers by Lehman Brothers. Lehman's survey in December had forecast worldwide E&P spending in 2008 would rise only 11% (see NGI, Jan. 7).
The survey estimated that E&P spending in the United States this year will jump 15% to $98 billion; Canadian producers are expected to spend 11% more, or about $27.5 billion. Last December producers surveyed said they would only spend 3.5% more this year in the United States. And in Canada E&P spending was expected to drop 12%.
The semi-annual survey of 398 energy companies, which was issued on Friday, estimated that worldwide E&P spending in 2008 would be around $418 billion, well ahead of the $349 billion spent in 2007. Analysts said there has been a "substantial acceleration" in spending forecasts from just six months ago.
PetroCanada said it would spend 132% more in North America this year than in 2007, according to the survey. Anadarko Petroleum Corp. said it would hike its 2008 North American spending by 73% from a year ago. Also increasing their North American E&P spending -- heavily weighted to Canada -- are Talisman Energy Corp., 34%; Nexen Inc., 32%; Murphy Oil, 30%; Canadian Natural Resources, 25%; Apache Corp., 17%; Marathon Oil Corp., 15%; and Occidental Petroleum Corp., 13%.
International E&P spending in 2008 is pegged to jump 22% to $293 billion, according to the survey. In December Lehman estimated international spending would rise 16%.
Among the integrated oil majors, Total is now forecast to spend 21% more on its E&P projects worldwide than in 2007, while Royal Dutch Shell's spending is expected to jump 19%. Chevron Corp. is hiking its spending 18% this year, and ExxonMobil Corp. plans to spend 17% more. ConocoPhillips has increased its 2008 E&P spending by 13%, and BP plc's spending will be 9% higher, according to the survey.
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