The report pointed out that an “outstanding concern” in 2022 is execution challenges related to the pandemic and increased inflationary costs for steel and other input factors. “These are likely to make operators mildly cautious regarding significant capital commitments … major offshore operators are being challenged on their portfolio strategy as the energy transition unfolds, with many exploration and production companies already directing investment budgets to low-carbon energy sources.”

Commenting, Rystad Energy’s head of energy service research, Audun Martinsen, said: The pervasive spread of the Omicron variant will inevitably lead to restrictions on movement in the first quarter of 2022, capping energy demand and recovery in the major crude-consuming sectors of road transport and aviation.

“But despite the ongoing disruptions caused by [the] Covid-19, the outlook for the global oil and gas market is promising,” he added.

Below are some of the key points in the report:

• The increase in investment will largely be driven by a 14% year-on-year rise in upstream gas and liquefied natural gas investments in 2022.
• Upstream gas and liquefied natural gas will be the fastest-growing segment this year, with investments rising to nearly $149bn, from $131bn in 2021. This falls short of the pre-pandemic total but investment in the sector is expected to surpass the 2019 levels of $168bn in two years, reaching $171bn in 2024.
• Upstream oil investments are projected to rise 7 per cent yearly to $307bn in 2022. However, the midstream and downstream investments will fall 6.7 per cent on annual basis to $172bn this year.
• Global shale investments are predicted to surge 18 per cent to reach $102bn this year, almost $16bn more than last year.
• The offshore investments are set to reach $155bn, up 7 per cent annually, while conventional onshore will jump 8 per cent to $290bn this year.
• This year’s investment growth is very much “pre-programmed” by the $150bn worth of greenfield projects sanctioned last year, up from $80bn in 2020, Rystad said.
• Approving activity in 2022 is likely to mirror last year’s levels, with a similar amount of project spending to be unleashed in the short to medium term.
• Regionally, Australia and the Middle East stand out in terms of investments.
• Investments in Australia are expected to rise 33 per cent owing to the greenfield gas developments. In the Middle East, investments will rise 22 per cent this year as Saudi Arabia boosts its oil export capacity and Qatar expands production and LNG export capacity.