According to a report by "Oil & Gas Online," a survey conducted by Lehman Brothers revealed that global investments in oil and gas exploration and production are set to rise significantly in 2006. The firm attributed this increase to persistently high energy prices, which have outpaced the cost expectations of major industry players.
The survey, which included responses from 325 companies worldwide, found that total spending on oil and gas exploration and production is expected to jump by 14.7% compared to 2005, reaching $238 billion. In the U.S., where 247 companies participated, investment is projected to grow by 14.9%, reaching $57 billion this year. Companies across all sectors are planning substantial increases in their 2006 budgets.
Outside North America, 85 companies also reported a similar trend, with expected investments rising by 14.9% to $156 billion.
Lehman Brothers noted that current oil and gas prices are highly influential in shaping exploration strategies. Many companies mentioned that if oil prices drop below $45 per barrel or natural gas prices fall below $6 to $6.5 per million cubic feet, they may reconsider their drilling expenditures.
For 2006, the investment plans were based on an assumed West Texas Intermediate (WTI) crude price of $49.89 per barrel and a natural gas price of $7.64 per million cubic feet. This suggests that the industry remains optimistic but cautious, as any significant price decline could prompt budget adjustments.
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