Upstream exploration and production (E&P) spending in North America is leading the world for the seventh consecutive year, according to a report by GlobalData.

The Oil & Gas Capital Expenditure Outlook, issued on Thursday by the natural resources data firm, reviewed capital spending to date and offered a forecast for the near-term.

Increased activity in the E&P sector will be the primary driver in lifting capital expenditures (capex) to $1.039 trillion this year, GlobalData predicted. Total global capex is expected to jump by 13.4% from 2011's $916 billion as operators "intensify" upstream activity in the Gulf of Mexico, Brazil and the Arctic region.

"Investor confidence in new upstream projects is being driven by the increasing number of oil and gas discoveries (242 last year alone), combined with consistently high oil prices and the arrival of new technologies that are giving the major firms access to deep offshore reserves that were previously technically and financially unviable," the authors said.

North America is expected to witness the highest capex spending this year at $254.3 billion, which is almost one-quarter (24.5%) of the global total. Compared to a global average capex growth rate year/year of 13.4%, North America's is forecast to grow 15.7%. North America has increased its capex for this year at a rate of 14.3% over 2011 investments. North American upstream spending has led all regions for seven consecutive years, GlobalData said.

"The increase of unconventional oil and gas activities, especially the continuing exploitation of shale oil and gas sites and the development of Canadian oilsands, are the major drivers for these investments," the report said. "Besides the upstream investments, the region's pipeline segment attracted the second-largest capex for 2012."

After North America, the Asia-Pacific region is predicted to be the second-highest in capex in 2012 at $253.1 billion, while the Middle East and Africa each are forecast to spend just under $230 billion.

National oil companies (NOC) are seen as the biggest upstream spenders, contributing close to half of total capex, followed by integrated oil companies (IOC) and independents.

From now through 2016 Brazil's Petroleo Brasilerio SA, better known as Petrobras, should be the top NOC in terms of spending, while ExxonMobil Corp. is predicted to be the No. 1 IOC. Petrobras and ExxonMobil together "plan to undertake a massive oil and gas capex of $409 billion through to 2016," said the GlobalData report.

Independents are expected to witness the largest increase in capex this year from 2011, with spending 21.1% higher.

"Of the global oil and gas capex, future E&P investment will be driven by the development of new oil and gas discoveries," said GlobalData. "In 2011, about 250 oil and gas discoveries were announced worldwide, the majority of which were located in Asia-Pacific (32%), followed by the Middle East and Africa (25.6%), South and Central America (20%), Europe (19.6%) and North America (2.8%)."

As development ramps up in the new discoveries, so will E&P spending, said the authors.

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