Global oil and gas capital expenditures rise despite decline in profits
Singapore, 13 November 2013 – Worldwide capital expenditures among oil and gas companies increased 13% in 2012 despite relatively flat upstream revenues and a decline in upstream profits. Worldwide oil reserves increased 3%, while growth in worldwide gas reserves was impacted by the recording of downward reserve revisions due to low natural gas prices in North America, according to EY’s annual Global oil and gas reserves study, which analyzes the worldwide and regional exploration and production (E&P) results for 75 companies for a five-year period from 2008 to 2012.
The report also finds that the growth in spending was a result of strong exploration and development activity, as exploration spending increased 14% and development spending was up 22% in 2012.
Dale Nijoka, EY’s Global Oil & Gas Sector Leader says: “Strong capital spending has resulted in the discovery of substantial new reserves. However, profits suffered in 2012 as an oversupply of gas reserves has kept prices low in North America. However, with increases in global demand, these new additional reserves will pay off over time.”
On Asia-Pacific, Sanjeev Gupta, EY’s Asia-Pacific Oil & Gas Leader says: “Last year was exceptionally good for Asia-Pacific, as extensions and new discoveries of natural gas were the highest during the last five years and around three times the normal production, which will ensure high levels of investment in the region during the coming years.”
Note to editors
The Global oil and gas reserves study is a compilation and analysis of certain oil and gas reserve disclosure information reported by companies in their annual reports filed with the US Securities and Exchange Commission or in their publicly available annual reports. This report presents the worldwide and regional exploration and production (E&P) results for 75 companies for the five-year period from 2008 through 2012. The results for these companies are generally representative of the E&P industry as a whole, with the exception that many national oil companies do not publicly disclose financial and operational data and their performance trends may vary significantly.
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