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The aggregate capital expenditure (capex) of Gulf Cooperation Council (GCC) national oil companies (NOCs) is expected to reach $110-$115 billion between 2024 and 2026, global rating agency S&P said in a new report.
“We expect the region's NOCs to take a broadly cautious approach to spending, with aggregate capex increasing only modestly by about 5% on average in 2024, compared with 2023 levels,” the report said.
The capex is mainly driven by production plans in Saudi Arabia, the UAE and Qatar.
Despite the sustained high level of investment, S&P noted that "this marks the start of a plateau after years of uninterrupted growth."
The slowdown in growth is likely to reduce rig demand, utilisation ratios, average day rates, and profitability of the region's drillers in Saudi Arabia and neighbouring countries.
According to S&P, Brent oil price is forecast to average $85 per barrel for the remainder of 2024, followed by $80 per barrel in 2025.
(Writing by P Deol; Editing by Anoop Menon)
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