Welcome to the end of the year! It’s been a long and arduous journey, but the energy production market does not sleep, and much like a toddler on a sugar rush, we need more energy! That can be especially true over the next five years, as market analysts and experts have noted that the forecast for the energy sector looks like a farmer awaiting rain for his crops, it’s time to grow. Market analysis points to several factors driving growth across the energy industry globally, with some regions of the world set to bring new projects online over the next few years.
The global upstream market is set to grow substantially over the next five years
The global population grows with every year that passes, and the energy market needs to grow along with it. This year alone, current population tracking experts note that between 120 and 130 million people were born. All those new babies and their families need electricity and heating to grow and lead the world into a new future.
Substantial annual population growth means that the energy market is set to grow to accommodate the new wave of energy demand that is set to wash over the world. Global upstream output capacity is set to grow over the coming years, with North America and Asia set to play a major role as the market expands. The US is currently embroiled in the Donald Trump administration, which we must remember is still in its first year of a four-year term.
The United States is set to expand its upstream gas and oil market substantially over the next few years
Over the past two years, that is to say, from 2023, the North American upstream oil and gas market has grown at an astonishing rate, bringing up to 180 new projects to the Final Investment Decision that they so desperately need. Representing a total investment of around $175 billion, 36 of these projects in North America are already operational, with a wave of new projects set for the same fate over the next five years.
Let’s not forget about the significant growth in the Asia-Pacific region
The sheer size of the North American continent means that there are a lot of people and industries that need daily, stable, and reliable energy from the market. However, the Asia-Pacific region is extremely densely populated. With a surging population that only grows with every passing year, the Asia-Pacific region has seen governments and energy companies outlining plans for substantial growth over the coming years.
The most obvious driver of growth in the Asian energy market is none other than China. With the upstream market reporting upwards of 70 projects currently being planned for a total investment of approximately $109 billion, the market in the region is set to dominate the global energy supply. With huge energy companies such as Chevron aiming for a new year that increases spending on upstream assets, the market is looking stronger than ever.
America and Asia are the go-to destinations to get a read on market sentiments
Asia is set to see several new licensing rounds over the next years, including new rounds in Malaysia, Indonesia, Brunei, Thailand, Pakistan, India, Vietnam, and Bangladesh, exemplifying the region’s role in advancing the upstream market into a new era of increased output capacity. North America will benefit from the significantly large energy companies that operate in the region, such as BP, with its plans to greenlight a new development in the Gulf of Mexico. The evidence suggests that, no matter where you look, the global energy industry, in particular the upstream market, is growing and will continue to do so.
