The Middle East will continue to increase its exploration and production spending in 2015, despite the falling price of crude oil.
Research conducted by Barclays found that IOCs in the region will increase their spending by 14.5%, bucking the wider international trend.
Worldwide spending on exploration and production is expected to fall by around 9%, as companies pull back from costly projects.
Barclays analyst, David Anderson, said: “Saudi Aramco and ADNOC are defiantly moving ahead with activity levels on projects largely unchanged as both are prepared to accept lower oil prices in the near term, with the expectation of improvement toward the end of the year.”
By contrast, spending in North America has been tipped to decline by 14%, while investment in Eastern Europe and Russia could drop by 13%.
In its analysis of NOC spending in the Middle East, Barclays said: “First, the substantial size of the NOC capital programs makes it difficult to meaningfully shift spending dollars from one year to the next, particularly as development projects have become more complex and take longer to finish (not just drilling and completion, but also infrastructure).
“Second, the NOCs need the oil revenue both to support state budgets and to fund subsidies that have increased following [the] Arab Spring.
“Therefore, even though the call on OPEC crude has dramatically fallen in recent years, spending must be maintained to offset any social issues that may arise.”
