How the Oil and Gas Industry Works

The oil and gas industry is one of the largest sectors in the world in terms of dollar value, generating an estimated $5 trillion in global revenue as of 2022.1.

Oil is crucial to the global economic framework, impacting everything from transportation to heating & electricity to industrial production & manufacturing.

Global oil and gas investment will increase by $26 billion this year as the industry continues its recovery from the worst of the pandemic and the hurdles imposed by the Omicron variant. Overall oil and gas investments will grow 4% to $628 billion this year from $602 billion in 2021, according to Rystad Energy analysis.

A significant contributor is a 14% increase in upstream gas and LNG investments. The segments will be the fastest growing this year, with an investment jump to around $149 billion in 2022 from $131 billion in 2021. While short of pre-pandemic totals, investments in the sector are expected to surpass 2019 levels of $168 billion in just 2 years, reaching $171 billion in 2024.


Ensuring that no one is left behind is also important.

Upstream oil investments are projected to rise to $307 billion this year from $287 billion in 2021, a 7% increase, while midstream and downstream investments will fall by 6.7% to $172 billion this year.

A global group of experts validated the typology, co-developed case study selection criteria and helped select the cases. The team presented the study’s framework during an initial global webinar, followed by a technical workshop and culminating with a “capstone” event to share the study’s findings and gather feedback from a global audience.

“The pervasive spread of the Omicron variant will inevitably lead to restrictions on movement in the first quarter of 2022, capping energy demand and recovery in the major crude-consuming sectors of road transport and aviation. But despite the ongoing disruptions caused by COVID-19, the outlook for the global oil and gas market is promising,” said Audun Martinsen, head of energy service research at Rystad Energy.

Global shale investments are forecasted to surge 18% in 2022, reaching $102 billion in 2022 compared with $86 billion in 2021. Offshore investments are set to increase 7%, to $155 billion from $145 billion, while conventional onshore will jump 8%, to $290 billion from $261 billion.

Regionally, Australia and the Middle East stand out, with Australia likely to see a 33% jump in investments thanks to greenfield gas developments. In the Middle East, investments will rise by an anticipated 22% this year as Saudi Arabia boosts its oil export capacity and Qatar expands production and export capacity of LNG.

This year’s investment growth is pre-programmed by $150 billion in greenfield projects sanctioned in 2021, up from $80 billion in 2020. Sanctioning activity in 2022 is likely to closely match 2021 levels, with a similar amount of project spending to be unleashed over the short to medium term.

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