Baku, Azerbaijan, Nov.2
By Leman Zeynalova – Trend:
Capital expenditure (capex) among Asia’s oil and gas companies is set to increase for the third consecutive year in 2019, with the latest guidance figures across 15 selected companies indicating a 6.5 percent year-on-year increase in targeted capex to $103.2 billion, from $96.9 billion in 2018, Fitch Solutions Macro Research (a unit of Fitch Group) said in its report obtained by Trend.
The spending growth will be driven by region's the national oil companies, which will account for 88 percent of the y-o-y growth in capex in 2019, according to the company.
“After years of capital discipline, cost cuts, efficiency enhancements and investment high-grading, Asia’s national oil companies are now on relatively stronger footing to raise spending. This will fulfil two strategic objectives; supporting the domestic oil and gas sector and expanding their global footprints. The firms’ more robust spending plans point to improving confidence in the health of the global oil market and the outlook for oil prices,” said the report.
Fitch Solutions said that indeed, global oil prices averaged $75.3 per barrel over ten months of 2018, approximately 40 percent higher than the same period in 2017. “In our view, prices will remain supported over the coming quarters, driving revenues and appetite for investment.”
In particular, the company said that Asia’s large national oil companies such as Malaysia’s Petronas and Indonesia’s Pertamina are expected to raise spending for the year ahead.
“For Petronas, the anticipated commissioning of the Refinery and Petrochemical Integrated Development (RAPID) in Q119 could free up $4 -5 billion of capex, according to industry estimates. Pertamina will need to increase capex due to growing spending requirements across the entire oil and gas value chain,” said the report.
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