Industry News - Internet Inquirer - E&P spending to rise by 4.2% in '03E&P spending to rise by 4.2% in '03
by: OilOnline
Tuesday, December 17, 2002
Lehman Brothers expects global exploration and production expenditures to
increase by 4.2 percent in 2003, less than the 7 percent forecast going into
the survey. According to the Lehman Brothers Original E&P Spending Survey,
the 323 oil company participants project spending to total $132.4 billion-up
from the $127.1 billion in 2002. International spending is forecast to rise
by a solid 5.5 percent to $89.5 billion in 2003 while Canadian E&P
expenditures are forecast to advance by 7.2 percent to $12.7 billion. U.S.
E&P expenditures, on the other hand, are budgeted to decline by 0.7 percent
to $30.3 billion next year. Factors contributing the weak U.S. numbers are a
shift to overseas spending by the oil majors, cautious oil and natural gas
price forecasts, minimal growth in cash flow and a lack of quality prospects.
Other survey findings include:
The average oil price budgeted for 2003 is $23.22 per barrel.
o If oil prices averaged $20 per barrel next year, 37 percent of respondents
would cut budgets by 10-20 percent.
Average natural gas price budgeted is $3.42 per Mcf through 2003. o If gas
prices average $3 per Mcf, one-third of the companies would reduce budgets by
10 percent or less.
Significantly higher rig rates would cause 75 percent of the companies
surveyed to decrease their drilling programs.
Slightly more than half of the respondents believe drilling costs will
remain flat in 2003 while close to one-third think costs will rise.
|
