09 December 2013, News Wires – Oil and gas companies will spend about $723 billion on exploration and production (E&P) in 2014, an increase of 6.1 percent from 2013, Barclays Bank said in a report on Monday.
Major oil companies are slowing spending growth as they put more emphasis on increasing returns to investors amid a wave of shareholders activism in the industry, Barclays said.
Activist investors have pushed for shake-ups at a number of mid-sized energy companies this year including Chesapeake Energy Corp, Hess Corp and Transocean Ltd.
The Big Oil companies — Exxon Mobil Corp, Chevron Corp, Royal Dutch Shell Plc and Total SA and BP Plc — though not targeted by activist investors are also under pressure to boost returns.
BP has raised its dividend, cut back capital spending plans, and ramped up its asset sales target to $10 billion over the next two years from between $4 billion and $6 billion.
Barclays forecast an increase of more than 7 percent in E&P spending in North America in 2014, compared with a 2 percent increase in 2013, based on a survey of more than 300 oil and gas companies conducted last month.
Spending is set to increase in North America after two years of tepid growth, when weak prices in the United States made drilling for natural gas uneconomical in many onshore fields.