Brokerage Raymond James says its global industry survey of upstream oil companies shows an uptick of 3% in capex spending in 2024, plateauing after 2023.
** Says global spending in 2024 would mark a fourth consecutive increase, albeit the slowest one – there is, however, a cumulative drop of 33% from the peak level of 2013.
** “This points to the fact that capital discipline is emphatically here to stay, irrespective of how high oil prices may get” – Raymond James.
** “Also, here to stay is the industry’s adaptation to ESG investor pressure, as exemplified by net zero targets and rising emphasis on renewable and clean tech efforts”
** In the U.S., however, after a 27% increase in 2023, spending is set to fall 7% in 2024.
** After capex falling for three consecutive years, U.S. E&Ps finally increased spending in 2022 by 40%, followed by a 27% increase in 2023.
** Brokerage estimates a 2024 cash flow reinvestment rate of 59%, vs. amount in the pre-COVID era where spending averaged 120% of cash flow during 2010-2019.
(Reporting by Seher Dareen in Bengaluru)