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Oil and Gas CAPEX Outlook - Growth, Trends, and Forecast (2020 - 2025)

  • ID: 4997554
  • Report
  • March 2020
  • Region: Global
  • 120 pages
  • Mordor Intelligence
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The oil and gas CAPEX is expected to grow at a CAGR of more than 8.4% during the forecast period. Factors such as strong profitability following a trend to reduce project costs and optimise portfolios, which has led to divestment of low-margin fields and increased focus on investment in higher-margin growth opportunities, are expected to increase the CAPEX during the forecast period. Moreover, LNG-oriented gas projects are witnessing increased investment, as it is less carbon-intensive fuel and helps in transition to lower carbon economy. However, volatile crude oil and natural gas prices, coupled with slow economic growth at a global level are expected to restrain the oil and gas CAPEX during the forecast period.
  • Upstream sector is expected to be the largest segment which would have the highest CAPEX, as the several region’s state-owned firms are prioritising domestic oil and gas projects to improve energy security and reduce their dependence on imports.
  • Several greenfield projects, along with deepwater and ultra-deepwater exploration in African countries such as Senegal and Mauritania, possess ample opportunity for increased capital expenditure.
  • Asia-Pacific has recorded the highest gains in CAPEX and is likely to be the fastest growing region, owing to operations of global integrated majors along with national oil company’s and new investments during the forecast period.
Key Market Trends

Upstream Sector to Dominate the Market
  • After the downturn in the oil and gas industry, as crude oil prices increased, upstream sector gained momentum and capex represented a gain of 5.5% y-o-y in 2019 and 7.2% in 2018. As number of oil and gas projects continue to increase, the upstream capex is also expected to increase during the forecast period.
  • The upstream sector has almost 70% of the total capex allocated to the oil and gas sector and is expected to attract greater spending to fulfil the oil demand ensuring energy security. In 2019, IEA reported a CAPEX of USD 497 billion for upstream operations, with North America having the highest share.
  • The number of Final Investment Decision (FID) for upstream sector was more than 60, which was greater than midstream and downstream sector combined. Several upstream projects such as Agogo Oil Discovery and Glaucus Gas Discovery in Middle-East and Africa region have attracted major players and is expected to increase in CAPEX during the forecast period.
  • The United States is expected to lead oil-supply in the next six years, supported by shale industry which has led to transformation of the oil and gas industry, from nothing in 2010 to 7 mb/day in 2019. The exploration and production activities in the United States has led to the country exporting more oil than Russia and overtaking Saudi Arabia in coming years. So, increased investment in shale industry is expected to drive the capex in the upstream sector.
  • Hence, to meet the strong global demand for crude oil and natural gas, more investment is required for the exploration and production activities, which in turn is promulgating the CAPEX in the oil and gas industry.
Asia-Pacific to Dominate the Market
  • Asia-Pacific is expected to witness a significant growth in the oil and gas CAPEX in the coming years due to the recent discoveries in the offshore and onshore region, coupled with increasing energy demand from countries such as China and India.
  • The capital spending in the oil and gas sector is expected to witness a growth of 7% y-o-y in 2020 which is the highest amongst all regions. Major oil and gas companies have increased their spending, led by Chinese state-owned companies, notably PetroChina and Sinopec. These companies have raised their spending on domestic oil and gas exploration and production and on maintenance programs for mature fields.
  • India’s state owned ONGC is moving forward in domestic oil and gas which plans spend USD6.9bn in 2020, from USD3.7bn in 2019, to focus on development of assets in the Krishna-Godavari basin and new offshore, deepwater blocks that it acquired under the Open Acreage License Programme in 2019.
  • Moreover, the energy consumption in Asia-Pacific is expected to grow by 48% over the next three decades. China and India have been largest consumers of oil & gas in the Asia-Pacific region, and pipeline network is growing in both of these countries. Hence, the CAPEX for oil and gas in the region is expected to increase during the forecast period.
Competitive Landscape

The global oil and gas CAPEX market is moderately fragmented. Some of the key players are BP PLC, Exxon Mobil Corporation, Total SA, Chevron Corporation, and Royal Dutch Shell PLC.

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1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions



4.1 Introduction
4.2 Market Size and Demand Forecast in USD billion, till 2025
4.3 Crude Oil Production and Consumption Forecast, till 2025
4.4 Natural Gas Production and Consumption Forecast, till 2025
4.5 Installed Pipeline Historic Capacity and Forecast in Kilometers, till 2025
4.6 Historic and Production Forecast of Tight Oil, Oil Sands and Crude from Deepwater in kb/d, until 2030
4.7 Recent Trends and Developments
4.8 Government Policies and Regulations
4.9 Market Dynamics
4.9.1 Drivers
4.9.2 Restraints
4.10 Supply Chain Analysis
4.11 Porter's Five Forces Analysis
4.11.1 Bargaining Power of Suppliers
4.11.2 Bargaining Power of Consumers
4.11.3 Threat of New Entrants
4.11.4 Threat of Substitutes Products and Services
4.11.5 Intensity of Competitive Rivalry

5.1 Sector
5.1.1 Upstream
5.1.2 Midstream
5.1.3 Downstream
5.2 Location
5.2.1 Onshore
5.2.2 Offshore
5.3 Geography
5.3.1 North America
5.3.2 Europe
5.3.3 Asia-Pacific
5.3.4 South America
5.3.5 Middle-East and Africa

6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Operator Companies BP PLC Royal Dutch Shell PLC Chevron Corporation Total SA Exxon Mobil Corporation Oil and Natural Gas Corporation (ONGC) China National Petroleum Corporation (CNPC) Cairn Oil & Gas, a vertical of Vedanta Limited Petroleo Brasileiro SA Equinor ASA
6.3.2 Financial Institutions JPMorgan Chase & Co. Citigroup Inc. Bank of America Corp Royal Bank of Canada Barclays PLC Deutsche Bank AG Credit Suisse Group AG

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