According to the International Energy Agency (AIE), in 2017 the investment in oil and gas upstream (CAPEX) grew 4% annually and represented 2/3 of that of 2014. This pace of progress allowed it to resume a moderate climb path after the unfavorable performances in previous years, product of the collapse of prices in 2014, which meant a fall of 40% between 2014 and 2016.
By 2018, the AIE expects this rebound to continue up to 5% per year, with an increasing focus on short-cycle projects, especially in the United States in the shale basins and with a growing role of the oil giants, and an activity of consolidation of independent oil companies due to the greater competition that will be deployed in the sector. The investment in shale could increase 20% annually, which would represent 25% of the global investment.
It should be noted that the majors have tripled their investment in shale in two years, and it is expected to represent 18% of its spending in 2018 compared to 13% in 2017 and 6% in 2016. Chevron, for example, aims to triple its current production in the Permian basin in 2022 and Exxon quadruple in 2025 from a level of 200,000 barrels per day recorded at the beginning of 2018.
The investment in conventional crude projects will focus on mature fields, and with developed infrastructure that allows a shortening of its development cycle before the first pumping, which is an effect of the predominance that the short cycle is having in investment decisions.
The projections of the AIE transmitted in its report on World Investment 2018 in July of this year maintain a moderate rate of realization in the United States, according to recent data published by the company Evaluate Energy based on a sample of 64 companies in the sector located there.
In the third quarter this investment increased 4% versus the previous quarter and this represented its highest level for three years. According to the graph that follows, it can be noted how the path of investment growth has been slightly strengthened after the declining trend experienced until the third quarter of 2016.
This dynamic in oil investment, that started in 2017 thanks to more favorable oil prices, continues at a good pace in 2018 in terms of mergers and acquisitions. Thus we see how the company Global Data accounts for the increase of 77% in terms of mergers and acquisitions and 19% in capital expenditure, both in the third quarter of 2018 versus the previous quarter.
It is expected, however, that this moderate pace of investment in 2018 will exceed the forecast of 5% for the year made by the IEA and culminate with a higher rate of 8% according to the intention of expenditure collected by the investment bank Barclays in its most recent global survey that was published in August based on a survey of 200 companies in the sector.
In fact, Barclays recorded an increase in annual investment budgets for companies in the United States with respect to their previous survey in April of this year, going from 9% to 15%. In addition, this coincided with more optimistic announcements from several companies in the sector based on an environment of better prices and greater efficiency in drilling. At the international level, spending budgets increased from 4% projected in April to 5% in August.