Oil & Gas

Global gas investment is projected to grow significantly in the coming decades, despite criticism and campaigning by environmentalists and climate workers against the industry, as per a recent analytical report obtained by the Energy Research Unit. The report predicts that cumulative global investment in gas-related sectors will reach $9 trillion by 2050.

The upstream sector, which includes exploration and production, is expected to account for the largest share of global gas investments, estimated at $8.2 trillion. Meanwhile, the downstream sector, which includes processing, refining, supply, trading, marketing, and retail, is expected to account for $0.7 trillion of the total anticipated investments in the gas value chain over the next three decades.

The recent energy crisis following the Russian-Ukrainian war has prompted a global reassessment of energy security, leading many governments to prioritize expanding oil and gas projects in the coming years. Global oil and gas investment in the upstream sector rose 22 percent to $520 billion in 2022, driven by rising oil and gas prices and their volatility. This growth in investment was a significant shift in the industry after almost a decade of chronic underinvestment.

Despite the ongoing electric vehicle (EV) revolution and predictions that global demand for road fuel will peak in 2027, China's oil demand growth is being driven by the petrochemicals sector. The IEA reports that 90% of China's increased oil demand from 2021 to 2024 will come from chemical feedstocks like LPG, ethane, and naphtha. This shift towards petrochemicals is expected to continue driving China's oil demand growth, with significant implications for emissions and climate change.

In terms of regional investment classification, Asia Pacific and North America are expected to lead upstream investments in the global gas sector, followed by Eurasia, Africa, the Middle East, and Latin America, with Europe at the bottom of the ranking. Asia Pacific is forecasted to lead global gas investments in the upstream sector, followed by North America and Eurasia.

Overall, global gas investments are expected to rise to meet growing demand over the coming decades, with global natural gas production projected to increase by 33% to 5.3 trillion cubic meters by 2050. Despite the growth in gas investments, Europe is expected to be the only region where natural gas production will decline, with the continent's production estimated to reach 88 billion cubic meters by 2050.