Oil and gas giants are prepared to increase spending once more following a promising partial recovery in crude oil prices.
The recent recovery in crude oil prices has given oil companies, including Shell who make Shell Omala S2 G 320, increased confidence in the market. This has encouraged them to rekindle many of the projects that were put on the backburner when the investment freeze kicked in back in 2014.
Brent Crude has recently been trading at approximately $55 (£45.35) per barrel – which is double its lowest price in 12 years, hit in 2016 – after members of the Organization of Petroleum Exporting Countries, along with non-member producer nations, agreed to their first output cut in over 10 years, last December.
This, along with significant cost cuts made by oil corporations since oil prices fell rapidly from $100 (£82.46) per barrel two years ago, has increased cash flow creation across the oil sector and made the financial aspect of many possible developments seem more appealing.
Speaking to the Financial Times, emery consultancy wood Mackenzie analyst Malcolm Dickson said:
“The industry has moved out of survival mode, through a phase of adaptation to lower prices and now it is beginning to think about renewed growth.”
It is predicted that global spending by the world’s leading exploration and production corporations will amount to roughly $450 billion this year – an improvement of 3 percent on 2016’s figures and a good sign for the oil industry that circumstances may be improving for those who deal in the commodity.