Investment in the global oil and gas upstream sector rose by 39 percent in 2022, reaching $499 billion—the highest level since 2014 and the largest year‑on‑year gain on record. The International Energy Forum and S&P Global Commodity Insights attributed this surge primarily to higher costs. During the same period, the global rig count increased by 22 percent compared with the previous year, although it remained 10 percent below 2019 levels.
The report warned that to secure adequate supplies, annual upstream investment must grow from $499 billion in 2022 to $640 billion by 2030. This 2030 target is 18 percent higher than the estimate made a year earlier, reflecting the impact of rising costs. While oil and gas exploration and production are enjoying record profits, companies are focusing on returns to shareholders, share buybacks, and debt repayment.
The authors noted that near‑term economic headwinds are weighing heavily on markets and investors. If a recession occurs in 2023, the duration and depth of the downturn could keep oil‑demand growth below trend for the next few years, potentially extending the post‑pandemic demand stall to five years. Even after economic activity recovers, demand is likely to be less oil‑intensive than it would have been, due to fuel switching, electric‑vehicle penetration, efficiency improvements, and accelerated climate policies.
These near‑term demand uncertainties and possible medium‑to‑long‑term consequences add to investment hurdles, but they also create an opportunity for upstream investment to align supply with demand. Energy security has re‑emerged as a politically strategic imperative, prompting greater government intervention and a shift away from an “energy abundance” mindset. Governments and investors can view this both as a warning and as an opportunity.
The International Energy Forum, the world’s largest international organization of energy ministers, represents 72 countries, encompassing both producing and consuming nations.
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