International oil and gas companies are set to increase their spending on exploration and production in 2014, with the rise being most significant in North America, according to a new report by Barclays.
Overall, the analysis predicts that spending on exploration and production next year will reach $723 billion globally. In North America oil and gas companies are expected to increase spending by more than 7 percent, up on 2 percent in 2013. This prediction is based on a survey of more than 300 oil and gas companies conducted over several months and completed in November.
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Spending on exploration and production will also rise outside North America, although more modestly. Companies are expected to invest 6.1 percent more in 2014, to an all-time high of $524 billion. By contrast, in 2013 spending rose by 10 percent, Reuters reported. Apart from North America, other areas that are likely to see rapid growth in oil and gas production include the Middle East and Latin America.
The report from Barclays states that oil and gas companies are projecting their exploration and production budgets based on oil prices of $98 per barrel for Brent and $89 per barrel for West Texas Intermediate, and a U.S. natural gas price of $3.66 per British thermal unit, according to Reuters.