This will amount to the strongest increase since 2014, when capital expenditure on the Upstream segment climbed by 25 %.

    North America will be the main driving force behind the increase – capital expenditure in the Upstream segment will grow by 25 % (to $104.6 billion). This dynamic is linked in part to the effect of a low statistical baseline. Oil majors working in production in North America (including ExxonMobil, Chevron, ConocoPhillips) decreased their capital expenditure in 2021 by 22 % and will increase it in 2022 by 28 % (to $31.1 billion).

    The same picture applies to large Upstream companies, such as Hess, Apache Corp. or Chesapeake Energy Corp. – their total capex rose 1 % in 2021 and is due to climb to 18 % in 2022 (to $21.3 billion.)

     Expenditure could be further encouraged by the lifting last June by a Louisiana court last June of a moratorium allowing federal lands and waters to be available for leasing for oil production. That court ruling could prompt companies to conduct more exploration for drilling work.

   The leader in terms of restoring capital expenditure in the Middle East is the Kuwait Oil Company. In 2021, the company reduced its expenditure by 42 % in 2021, while in 2022 it is to increase it by 30 % (to $4.6 billion). A key role will be played by a drive to boost production capacity from 2.6 million barrels per day now to 3.5 million bpd by 2025. In order to do so, the company will have to expand the number of active wells – the average figure declined from 45 in 2020 to 24 in 2021.

    In the United Arab Emirates, the ADNOC company has similar plans to increase production levels from the current 4.2 million bpd to 5 million bpd in 2030. The company in 2022 is to increase its capex in 2022 by 11 % (to $8 billlion).

    A key role will also be played by Saudi Aramco, which in 2022 will boost its capital expenditure by 16 % (increasing to $8 billion). Saudi Aramco also playsa n important role – increasing its capex spending by 16% in 2022 (to $13.9 billion) thanks to the development of its Jafurah gasfield, with reserves of 5.7 trillion cu.m.

    Capital expenditure is also set to rise in 2022 in Latin America (by 28 % to $24.8 billion – compared to an increase of 17 % in 2021. The main driving force behind the growth is Brazil’s Petrobras, which is expanding its capex spending from $6.7 billion in 2021 to $8.8 billion in 2022. Nearly 90 % of that sum is earmarked for production at subsalt deposits (63 %) and above-salt deposits (26 %) on the Atlantic shelf.

    Mexican state company Pemex will also increase capex spending (thanks to a reduction in income tax assessment rates from 54 % to 40 %) as well as Ecopetrol in Colombia (a 32 % rise to $3.5 billion) and Argentina’s YPF (a 28 % increase to $2.7 billion).

    Russia and ex-Soviet states in the Commonwealth of Independent States will increase capex on Upstream by 19 %  (to $37.4 billion), while Europe will do so by 10 % (to $17.6 billion) and Africa by 1 % (to $4.1 billion). India, Asia and Australia plan increases of 14 % to $75.8 billion).

    In the structure of world-wide production in 2022, 50 % will be accounted for by land-based operations and 22 % by offshore production – outside North America. As for North American production, the increase of 28 % will be divided between land-based 25 % and offshore 3 %.

    The results of the survey reflect to a great extent expectations in terms of increased supply observed on oil markets in the transition from 2021 to 2022.     Overall world-wide production of oil and liquid hydrocarbons in 2022 will rise by 6.2 million bpd, according to a January forecast by the international Energy Agency (IEA). Demand, starting from a higher statistical baseline, will increase from the levels of the current year “only” by 3.3 million bpd and that could yet cool bullish sentiment among investors.