IEA sees 2010 boost in energy spend

Money spent on exploration and development projects would however still be about 10% below its investment peak seen in 2008, Reuters cited Trevor Morgan as saying at an industry event.

“We don’t actually see much of an increase in capacity on a net basis in the next 5 years,” said Morgan.

“Hence our concern is that the industry will need to invest more in the years to come to meet the increasing demand that we project.”

He estimated that investments in the upstream oil and gas sector fell about $90 billion in 2009.

Morgan told Reuters the recent rise in financing costs in the wake of the debt crisis in Europe, which prompted a rise in the LIBOR benchmark, was a risk to the projected rebound in investments this year.

“It is a risk…but we have to see, if financing costs remain high, or it gets even more expensive then it could have a material impact on the investment number for the whole year,” he said.

Morgan said though that not all oil and gas producing companies would be impacted to the same extent.

“It depends on the company. Some companies are much more sensitive to financing costs than others, the majors they can ride these waves, fluctuations in financing costs much more easily,” he said.

Chinese Premier Wen Jiabao said on Monday global economic growth was vulnerable to sovereign debt risks and raised the possibility of a second economic downturn.

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