SOURCE: Industrial Info Resources

Industrial Info Resources

February 16, 2010 05:00 ET

Sinking, Soaring, and Shifting: Outlook for 2010 North American Oil & Gas Project Spending, a "Navigating the Currents of Change" Webcast on Industrialinfo.com

SUGAR LAND, TX--(Marketwire - February 16, 2010) -  Written by John Egan for Industrial Info Resources (Sugar Land, Texas) -- If you're in the Oil & Gas Industry, Jesus Davis has some bad news for you. Then again, depending on where you operate in the segment, he also has some good news.

Davis, Industrial Info's manager of research for the oil & gas industry markets, spoke about project spending for the North American oil & gas industry at Industrial Info's "Twenty-Ten Industrial Market Outlook," held in Houston on January 27.

Industrial Info is tracking about $30 billion in North American oil and gas projects that are scheduled to kick off in 2010. This sum is down about $7.3 billion from the projected spending that Industrial Info was tracking three months ago for 2010.

The "Twenty-Ten Industrial Market Outlook" event coincides with Industrial Info's release of the 2010 Global Industrial Outlook, which highlights the industrial spending forecast for the coming year. Since 1993, IIR has published a forecast for capital and maintenance spending for the industrial market in North America, and the 2010 outlook marks the fifth year of projecting spending estimates around the world.

The Houston event was attended by about 500 business and sales leaders representing equipment vendors, distributors, manufacturing firms, engineering and construction firms, labor unions and financial service companies. This event was the first of several industrial spending forecast events that Industrial Info will hold throughout North America in 2010. Future market outlook executive briefings are scheduled to take place in Denver, Colorado; Atlanta, Georgia; Baltimore, Maryland; Cleveland, Ohio; and Pittsburgh, Pennsylvania.

At the Houston event, Davis provided a summary of North American spending for oil and gas production, transmission, and storage projects that are scheduled to start construction this year. He also contrasted the industry's current project spending with spending levels compiled in November:

  • Spending on oil and gas production will total about $15.3 billion this year, down about $300 million from what was forecast three months ago

  • Spending on oil and gas transmission will reach about $8.8 billion, a decline of nearly $700 million from the $9.54 billion this segment planned to spend last November

  • Spending on oil and gas storage and terminals will fall by an estimated $7.4 billion this year, to $4.8 billion

Project spending fell dramatically for the storage and terminals segment, because several big-ticket projects, such as liquefied natural gas (LNG) terminals, have pushed their construction start dates into 2011, causing them to drop out of the 2010 spending outlook, Davis told the Houston audience. The Bradwood Landing LNG terminal in Oregon and the expansion of the Elba Island LNG Terminal in Georgia also could possibly be pushed into 2011, lowering spending in 2010 even more.

"It may not be front-page news to say that oil & gas project spending is volatile, or that spending is driven by oil and gas prices, but those truisms have been certainly been demonstrated in recent months," Davis said.

Industrial spending is necessarily dynamic, he continued, and this dynamism is reflected in Industrial Info's rigorous quality-assurance research process. Like all of Industrial Info's 2010 industry outlooks, the projection for the Oil & Gas Industry's capital and maintenance spending project activity is driven by Industrial Info's commitment to reporting, confirming, and frequently updating capital and maintenance project spending data. Industrial Info's quality-assurance principle, which it trademarked as the Living Forward Reporting Principle™, ensures that clients are provided with the most accurate and current market intelligence on industrial project spending around the world, including capital projects, maintenance spending, analytics, and market forecasting.

Looking on the bright side of the oil & gas project spending, Davis noted that more oil and gas rigs are operating today compared to last November. Citing data from Baker Hughes, Davis said that the U.S. has about 100 more oil rigs operating today than in November. Similarly, the number of gas rigs in the U.S. also has increased by about 100 during that time. Click here to join Mr. Davis on this edition of "Navigating the Currents of Change" for a discussion of the spending outlook for the Oil & Gas Industry.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news. For more information send inquiries to oilandgasproductiongroup@industrialinfo.com or visit our website at www.industrialinfo.com.

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