Press Release: US oil and gas industry is ready to spend as confidence surges, but research finds signs of cost consciousness relaxing


Press Release
Houston, Texas
22 January 2019

Senior oil and gas professionals in the United States are among the world’s most confident about the outlook for the sector in 2019, as companies prepare for significant increases in capital expenditure (capex) over the coming months.

New research published by DNV GL, the technical advisor to the oil and gas industry, finds that 85% of sector leaders in the US are optimistic about the industry’s growth prospects in the year ahead, up sharply from 60% in 2018. This compares with three quarters (76%) reporting confidence among respondents globally.


Full of confidence, and buoyed by favourable government energy policies, the majority (71%) of senior oil and gas professionals in the US agree that more large, capital-intensive oil and gas projects will be approved this year than in 2018.

These findings have been published in A test of resilience, DNV GL’s ninth annual benchmark study on the outlook for the oil and gas industry. The research is based on a global survey of nearly 800 senior oil and gas professionals, and in-depth interviews with industry leaders.

The US has the highest expectation of capex increases out of all countries and regions analysed in DNV GL’s study. 43% of respondents from the United States aim to increase capital spending in 2019, compared to just 23% a year ago. By contrast 30% of respondents globally expect to see a rise in capex this year. There are similarly optimistic findings for operating expenditure (opex), with the 31% predicting increased opex in the US outstripping both last year’s 20% tally and the 22% expectation level globally in 2019.

  • 85% of oil and gas industry leaders in the US are optimistic about the industry’s growth prospects in the year ahead, compared to 60% going into 2018
  • 71% expect more large, capital-intensive oil and gas projects to be approved this year than in 2018
  • 42% believe suppliers will drive notable price inflation this year
  • 15% say cost efficiency is a top priority for their companies in 2019, compared to 35% in 2018

“Surging oil and gas industry confidence in the US is built on the foundation of improved financial resilience due to hard-earned cost efficiencies, cost discipline, best practice, collaboration, standardization and the continued recovery and stabilization of oil and gas prices for most of 2018,” said Frank Ketelaars, Regional Manager, the Americas, DNV GL – Oil & Gas.

“There are brighter prospects for activity and investment across the value chain this year and beyond. Deepwater projects are back on the agenda in the US after the sector has focused on reducing development costs while maintaining high safety levels. OPEC is among those predicting sustained growth in US unconventional oil production over the next few years. Additional LNG facilities will also start up or win approval in 2019 to support the country’s strong and growing role as an exporter of LNG. Rising availability of affordable natural gas and related liquids from unconventional plays is the basis for new investment in petrochemicals,” Ketelaars added.

frank ketelaars

Frank Ketelaars

As the oil and gas industry prepares to increase capital and operational spending, DNV GL’s research reveals that companies in the US also risk relaxing their tight grip on the cost efficiencies established during the recent market downturn. The proportion of respondents whose organizations will assign top priority to cost efficiency this year has fallen from 35% in 2018 to 15% in 2019; the lowest globally. In turn, the old spending habits which affected the sector during the pre-2014 period of high oil prices may be returning. 42% of respondents in the US believe that suppliers will drive notable price inflation this year.

Other key findings from DNV GL’s survey include:

  • Skills shortages and an ageing workforce is the most cited (28%) barrier to growth in the US oil and gas industry this year, as senior oil and gas industry professionals seek to recruit. 37% of US-based respondents expect to increase headcount in 2019, compared to just 20% in 2018 and 34% globally this year.
  • Amid the US Administration’s softening of climate change policies, and reviving investment intentions in oil and gas, there appears to be growing uncertainty over the momentum for decarbonization in the US oil and gas industry. Only 26% of senior managers agree that their organizations are actively adapting to a less carbon-intensive energy mix against 51% at a global level.


Download a complimentary copy of A test of resilience from:


Neil Slater
Head of Media Relations
DNV GL – Oil & Gas
Tel: +44 (0)7876 578 353

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