Surging oil, gas, and power prices, together with the European Union (EU)’s goals of becoming less dependent on Russian supplies, and post-Covid-19 pandemic inflation, will catapult global energy spending this year to a record $2.1 trillion. Significantly, similar levels of spending have not been seen since 2014, Rystad Energy research shows.
Sinopec will spend record amounts this year to increase oil and gas drilling as China aims to bolster its energy security and insulate itself from volatile global commodity markets. Significantly, the news comes as the Chinese giant pauses new investment in Russia projects over sanctions risk.
China’s national oil companies, CNPC, CNOOC, and Sinopec, are expected to spend over $120 billion on drilling and well services by 2025 to help meet rising domestic oil and gas demand. With 118,000 wells estimated to be drilled in China, analysts at Rystad Energy reckon there will be significant opportunities for innovative suppliers.
Most UK adults want government spending on North Sea oil and gas redirected to renewables, according to a new campaigner survey.
Shell is to dramatically scale down investment and look for more cost savings as it attempts to adapt to a lower oil price environment.
An oil shock may be lurking around the corner as the price bust has hammered investment in future supply, according to the International Energy Agency.
Petronas has warned it may need to borrow or tap into reserves to meet its dividend this year and fund reduced spending.
Woodside Petroleum said its spending for the next year will be an estimated $170million lower than previously planned.
Volkswagen said it has cut £701million from its investment plan for the next year following on from the emissions scandal it has been embroiled in. The company said it would cap spending on property, plant and equipment at around $12.8billion, which is around 8% less than its previous estimate.
Lundin Petroleum has cut its expenditure for 2015 by 31% and said it would be focusing its sending on development projects. The company has set its development, appraisal and exploration budget would at $1.45billion. Development projects have been budgeted at $980million which represents a 30% decrease on forecast 2014 expenditure.