Moody’s Investor Service has projected that global upstream capital spending will increase by 10-15 percent to reach $470 billion by 2023. However, the report states that this spending level will still remain below the levels seen between 2015 and 2019. According to the report, the oilfield services (OFS) sector in Europe, Middle East, and Africa (EMEA) is expected to benefit from this increase in spending, especially in the Middle East, where high oil prices are driving the development and exploitation of reserves.
Moreover, the report highlights that the large capital spending programs of the Middle East’s national oil companies (NOCs) will continue to drive the supply-demand imbalance in the jackup rig market. The strong operating performance of NOCs in the Gulf Cooperation Council (GCC), supported by the recovery of oil demand in 2021 and 2022, will drive long-term rig renewals, led by Saudi Aramco. Moody’s also expects to see continued growth in the contracted rig count in the GCC region, with the count rising to 131 rigs in 2022 from 115 in 2021.
In a separate report, Oslo-based Rystad Energy noted that spending in the offshore oil and gas (O&G) sector in the Middle East is set to increase from $33 billion in 2023 to $41 billion in 2025, providing additional opportunities for the OFS sector.
