BAKU, Azerbaijan, September 16. Spending by oil and gas companies on upstream operations remains a key driver of global energy supply, says the International Energy Agency (IEA), Trend reports.
Upstream investment, which includes exploration, field development, and maintenance of existing assets, accounts for around 60% of total capital expenditure in the sector.
After a sharp decline during the COVID-19 pandemic, upstream spending has gradually recovered. Based on recently announced and revised company plans, the IEA expects investment to fall slightly by 5% to just under $570 billion in 2025.
Over the past decade, allocation of upstream spending has remained broadly stable: roughly 10% for exploration, 20-30% for new conventional fields, 40% for existing fields, and 20-25% for U.S. shale and tight oil projects. In 2024, oil accounted for three-quarters of upstream investment, with the remainder going to natural gas.
The IEA highlights regional trends, noting that the Middle East is expected to capture a record 20% share of global upstream spending in 2025, despite very low production costs, while North America will continue to lead in absolute investment levels.
Upstream capital expenditure covers a wide range of activities, from initial exploration and field development to refurbishments and upgrades that extend the life of existing assets. Meanwhile, operating costs, including maintenance, logistics, and regulatory compliance, have remained relatively stable.
