North American onshore spending in 2013 is forecast to be dominated by Big Oil, international oil companies (IOC) and national oil companies (NOC), according to the latest annual review by Barclays Capital.

U.S. independents blew through most of their 2012 capital expenditure (capex) plans by the end of September, and they are likely to moderate spending in 2013, analyst James West said during a conference call last Tuesday (Dec. 4). That likely won’t be the case for the super majors and foreign producers.

Based on Barclays recent survey of more than 300 global producers, U.S. capital spending is expected to be up 0.7% year/year to an estimated $139.634 billion from $138.718 billion. Canadian capex is set to increase around 0.6% to $44.696 billion from $44.431 billion.

Operators in North America are basing 2013 capital budgets on an average oil price of $85 West Texas Intermediate (WTI) and an average natural gas price of $3.47/Mcf Henry Hub. These budgeted levels compare to current prices of $89 WTI and $3.44 Henry Hub.

In Barclays’ review of aggregate dollar amounts to be spent in North America a “clearer picture” emerges, with the global majors, IOCs and NOCs crushing the independents when it comes to spending, West said. That aspect may not be evident yet, but it will become more so in the coming year.

“I think the super majors, the NOCs already have acquired the acreage they are going to spend on and we should see a steady increase in overall capital spending,” said West. “It shouldn’t take too long to be evident in the market…There may be a decline in the first half of next year through the seasonal period for the rig count in the Bakken and the Rockies. Beginning in March, the rig count should start to move up, led by the super majors and NOCs, and it will be evident then.”

To get an idea of how important Big Oil spending is to North America, consider U.S.-based majors ExxonMobil Corp. and Chevron Corp., which together represent about 12% of U.S. and Canadian spending, said West. The two producers haven’t locked in their capex plans, but already they “plan to spend an additional $1 billion between them in 2013.”

The major U.S., European and Asian IOCs and NOCs “are helping drive growth in the U.S. market and are increasing spending as a percentage of total U.S. upstream capex as a result. We estimate these global majors will constitute roughly 32% of total U.S. spending in 2013, including offshore, up from 27% in 2007.”

North American capex had jumped 27% in 2010 from 2009 and rose 31% in 2011, but it was only 4% higher this year. According to West, the constrained spending in North America this year resulted from a variety of factors, including lower natural gas and natural gas liquids prices, as well as “modestly” lower WTI oil prices; volatile differentials in Canadian basins; logistical challenges in many of the newer oil plays; and a desire by producers to spend within cash flow.

Several large North American service companies had indicated to Barclays that producers already had overspent this year’s budgets and were planning to curtail spending in 4Q2012, West said in the conference call. So his team examined the budget run-rate for a sample of the large domestic independent operators to gauge the spending levels through December. Based on their sample, they estimated that the independents already had spent 80-85% of their planned 2012 budgets.

Because U.S. upstream spending historically is dominated by the independents, lower activity is expected to persist through this month. “We anticipate a relatively short-lived pullback, however, as our sample also suggests the spending decline will trough in 4Q2012,” he said. Next year’s U.S. budget forecasts for each company in Barclays’ 322-company sample implied average quarterly spending levels “considerably higher” than in 4Q2012.

Barclays began its survey in early November and finished it Nov. 30. The survey tends to be “accurate directionally,” even though the budgeting process for many operators still is under way. “The industry remains in what we believe are the early days of the global upcycle, valuations remain at depressed and attractive levels, and fundamentals are improving in our view,” said West.

North America historically has been a “short-cycle market characterized by volatile swings in activity,” but the shift toward oil and liquids drilling “has significantly reduced the cyclicality in the region and will result in more consistent spending levels, in our view. Long-term and across cycles, we expect spending growth in North America to remain in the high single digits through at least 2016.”

Energy stocks “suggest continuing deterioration” and the sentiment is negative, but “what the market doesn’t see is the increase in spending by majors and national oil companies, which recently have acquired acreage in North America,” West said during the conference call. The Big Oil producers “don’t face the same cash constraints that the independents face, and they represent one-third of U.S. spending, while independents are expected to spend 1% less.”

Service prices should decline in the coming year as operators complete their rig turnarounds to oil/liquids from gas basins. “In North America…costs come down significantly with pressure pumping pricing down probably 25% from its peak, and it’s down for land rigs in the 10-15% range,” said West. Through 2013 “the rig count starts to rebuild and it stabilizes pricing for those services…Leading-edge costs are to remain mostly stable in North America and in the Permian and Bakken, in particular.”

Barclays also expects to see “steady improvement” to expand pipeline infrastructure and remove bottlenecks in several areas, including the Bakken. “The Bakken has been a pretty challenging area to conduct business,” said West. “We hear stories about [operators] parking frack crews in Walmart parking lots” because of a lack of housing. “They are paying high salaries to drive trucks with oil from North Dakota. It’s a tough place to operate now but it should get better.”