Analyst forecasts $1.7 trillion of upstream capex in next five years

Westwood Global Energy Group’s latest Upstream Investment Outlook (1Q 2018) suggests a dramatic shift in the oil market over the past 12 months. Offshore ordering has benefited from the higher oil price, with 15 new floating production systems ordered last year. However, the lack of sanctioning activity since the downturn will likely lead to a shortfall in project executions early in the 2020s. It believes the oil market will develop a sustained undersupply from 2021, accompanied by high oil prices and a surge in sanctioning of new, fasttracked projects. The analyst estimates $1.7 trillion of upstream capex from 2018-2022.