Earlier this month, we looked at growth opportunities in the oil and gas services and equipment sector ('One section of the energy world is booming'), as high investment levels in the Middle East and Asia offset a more cautious approach to spending in the US.
New data from the International Energy Agency (IEA) has backed this up – compared with 2017, overall investment levels in upstream projects are flat, but Middle Eastern and Asian national oil companies have increased spending by 50 per cent, displacing the majors and independent producers. They “account for almost the entire rise in spending for 2023-24”, the IEA said.
That doesn’t mean investment has totally slowed in the US: it has instead largely shifted to M&A. Around three-quarters of global oil and gas M&A activity involved US shale companies last year. This includes ExxonMobil (US:XOM) buying Pioneer and Chevron (US:CVX) buying out Hess. The latter deal could yet be blocked by Exxon, but its own buyout looks nailed on, increasing its onshore exposure significantly.