Major energy companies have focused on new projects during the shale boom, buying up large swaths of acreage. But that spending spree won’t continue in 2014, according to an analysis from Deloitte.
The consulting firm projects that oil and gas producers in North America will be focused on efficiently executing the projects they started in recent years, making plans to get high profits out of the holdings they racked up.
But several challenges lie ahead as the industry enters what some call “a harvest period”, which requires large numbers of new employees and creative approaches to financing, according to Deloitte.
Expanding pipeline network
Plans for spending on new projects mostly have moved into other sectors of the industry, with pipeline companies and chemical businesses preparing to benefit from expanded production in the United States, according to analysis from John England, Deloitte’s vice chairman and leader of its U.S. oil and gas division.
“The early stage of the North American energy renaissance was primarily an upstream exploration and production phenomenon,” England said in Deloitte’s 2014 outlook.
Production: U.S. oil boom will slow in 2015, feds forecast
He noted that oil and gas exploration and production spending rose 46 percent over the past four years, from $243 billion in 2009 to $355 billion in 2013. The growth came as oil companies tried to buy up as many drilling leases as possible in the United States, England said in an interview.