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Global oil and gas industry capital expenditure in 2011 rising 16%.

Global oil and gas capital expenditure witnessed a sharp recovery in 2010 with a growth of 15% over the oil and gas capex in 2009. The trend of increasing capex by global oil and gas companies is expected to continue in 2011 as a further capex growth of 16% is expected over the 2010 level. This increase in global oil and gas capex will be driven mainly by high, sustained crude oil prices, which have recovered from the impact of the global financial crisis of 2008.

With the decline in availability of crude oil and natural gas from onshore fields, costlier technology will be required to produce oil and gas from deep/ultra-deep offshore areas and unconventional sources such as oil and gas shales, oil sands and coal bed methane. It is estimated that in 2011, the global oil and gas industry will witness a total capital spend of $928 billion.

Most oil and gas companies are undertaking construction of developing capital intensive, upstream, midstream and downstream projects. National Oil companies and integrated oil companies will be key spenders, contributing 85% to the global oil and gas capex in 2011. The positive demand outlook is encouraging most integrated oil and gas companies to increase their capital spending. The capex growth is also driven by high refining margins of above $10 per barrel.
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Title Annotation:International
Publication:Pipeline & Gas Journal
Article Type:Brief article
Geographic Code:1USA
Date:Nov 1, 2011
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