Oil and gas companies will increase exploration and production spending to $712 billion this year, despite a slight pullback in spending by industry majors, Barclays said.
June 18 (Reuters) - Oil and gas companies will increase exploration and production (E&P) spending by 6 percent to $712 billion this year, despite a slight pullback in spending by industry majors, Barclays said.
Spending by major oil companies is expected to remain flat this year, Barclays said in a report on Wednesday. The bank earlier said it had expected spending to rise by nearly 3 percent.
The big oil companies, Exxon Mobil Corp, Chevron Corp, Royal Dutch Shell Plc, Total SA and BP Plc, are under pressure from investors to keep a tight lid on spending after years of record spending on major projects.
Barclays said it expected smaller, independent oil and gas companies to drive spending growth in North America, where capital budgets were expected to rise 8.4 percent this year, higher than the 7.3 percent it forecast earlier.
There is potential for higher capital deployment in the United States due to geopolitical risks in other oil-producing countries, particularly Iraq, Barclays said.
"I think the first place they are going to put that money into is North America," Barclays analyst James West told reporters on a conference call.
If conditions in Iraq deteriorate further large Western oil companies like Exxon Mobil Corp may contemplate reallocating dollars to more stable regions like the United States, he said.
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