OSLO, Norway – Rystad Energy expects global upstream oil and gas spending to grow 16% – or $142 billion – this year, as oil and gas producers invest to increase output.
As for green energy in 2022, global capacity should rise by 250 gigawatts (GWac) within wind and solar, with green energy spending rising by 24%, or $125 billion.
At the same time, spending is being inflated by soaring material prices, labor costs and shipping rates caused by the pandemic and the sanctions imposed on Russia.
Project costs in oil and gas have increased by between 10% and 20% on 2020 levels, due mainly to steel price rises and a tighter supplier market.
And demand for lithium, nickel, copper and polysilicon has pushed up renewable project costs by 10-35% within the same timeframe.
Upstream oil still dominates energy this year with Rystad predicting $658 billion of spending and a growth of 16% to produce 99.6 MMb/d of liquids.
The consultant foresees a 15% increase in spending for the gas and LNG sector to increase output from 390 to 396 MMcf/d.
As for green energies, solar, carbon capture and storage, hydrogen and geothermal are set for growth of 40-60% growth in spending.