Industry Trend Analysis - NOC Capex To Rise 2.5% In 2017 - JUNE 2017

BMI View: National oil company spending plans in the Middle East reflect more the pending tightening in oil markets, rather than OPEC's production cut. According to our data, capex in the Middle East is set to increase 2.5% in 2017 despite lower oilfield service costs.

The Middle East has been one of the least affected regions in terms of oil and gas investment over the oil price downturn. Capital budgets have largely been maintained, while national oil companies (NOCs) have benefitted from lower oilfield service costs. This has enabled drilling to remain steady, supporting longer-term growth plans. According to our estimates, capital expenditure among the largest NOCs in the Middle East will rise 2.5% in 2017 to USD58.0bn. We also expect at least an additional 1.7% increase in 2018.

The bulk of the key oil producing countries in the Middle East continue to pursue plans to increase production capacity over the coming three years:

  • NOC Capex Continues To Grow
    Capex By NOC (USDbn)
    g = long-term guidance estimates, e = BMI estimate. Source: BMI

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