North America offers the “greatest opportunities” for the natural gas and oil industry this year, according to new survey of executives.

Independent technical adviser GL Noble Denton, based in Germany, commissioned the outlook report, “Big Spenders,” which was written by the Economist Intelligence Unit of The Economist. The global survey of 185 senior executives was conducted in October and November; one in three respondents was a CEO or managing director representing firms with less than $500 million in revenue to more than $500 million.

According to the survey, 82% are “highly” or “somewhat confident” about the business outlook for their company, compared with 76% in 2011. Only 8% said they were pessimistic about 2012. Nearly two-thirds (63%) of the executives plan to invest “somewhat” or “substantially more” this year, versus 49% a year ago. Forty-one percent also expect to see increased investment in exploration activities, with only 4.3% anticipating a decline.

“The second annual Economist Intelligence Unit oil and gas industry barometer sends a clear message: companies are preparing to spend big in 2012, despite a slower growth in demand for oil and gas during the second half of last year, and concerns over the future of the global economy,” said GL’s Pekka Paasivaara, a member of the executive board.

“But this doesn’t mean that our clients are sanguine about their prospects for the year ahead. Findings from the report highlight a wealth of barriers to success, from rising operating costs to the worry of an impending shortage of skilled professionals and an uncertain regulatory environment in the post-Macondo era.”

The survey found a “shift” in where companies see the greatest opportunities for revenue growth.

“Last year Southeast Asia came top of the pile, with North America second, the Middle East and North Africa third, and the Far East fourth,” the report said. “This year the rankings have changed, with North America top, the Far East second, Southeast Asia third and Latin America fourth.”

Rising operating costs emerged as the main barrier to growth. If global economic conditions deteriorate, oil and gas companies likely would scale back their spending commitments where they can without damaging their wider portfolios, the survey found.

“While capital expenditure looks set to take off, industry leaders will need to invest selectively this year, keeping operating risks low during a period of prolonged uncertainty,” said Paasivaara. “Their success will be defined by an ability to develop innovative approaches to operating more safely, efficiently and sustainably than ever.”

The upstream remains the core focus for spending, which means that exploration “will be the major beneficiary of increased investment,” said respondents. Our survey shows that 41% of industry professionals expect to see increased investment in exploration activities over the year, with only 4% anticipating a decline.”

More than half of those responding to the survey said they expect an increase in wages over the next 12 months. Fifty-four percent also expect the cost of contractors to increase, compared to 11% anticipating a decline.

“Risk remains a key challenge,” said the report. “An overwhelming majority of respondents, 82%, either strongly or somewhat agree that regulatory issues have become more important in the post-Macondo period. Increasing regulation is regarded by more than 30% of respondents as the main challenge for their company over the next 12 months.”

Skills shortages are becoming more acute, said respondents. Last year’s survey put skills issues as fifth on the list of barriers and were only identified as a top three issue by 25% of respondents. “This year, the issue has risen to second on the list, and has been identified as a key barrier by 34% of respondents.”

Respondents were doubtful about whether unconventional natural gas projects were a “global game changer.” Because even though “the advent of projects like the Marcellus, Barnett, Haynesville and Fayetteville shales have created a supply glut that has affected global prices…there is widespread doubt as to whether the shale gas revolution can be exported outside North America.”

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