© Archyde.com. The energy crisis is driving a new wave of foreign direct investment in oil and gas projects
Foreign direct investment in oil and gas extraction projects has soared this year as energy companies raise capital to expand production amid rising prices and supply restrictions from Russia after its invasion of Ukraine.
According to data from fDi Markets, foreign investors announced 15 new oil and gas projects worth $42 billion between January and August of this year, equal to the total capital expenditures of the previous four periods combined.
This is also seven times higher than the $5.4 billion in capital expenditures committed in 2021.
At this rate, foreign direct investment in oil and gas extraction projects this year is expected to reach its highest level since 2009, when projects worth $87 billion were announced.
The global rise in foreign direct investment is primarily due to the huge investment pledges in the field of natural gas, with the majority of investments going to the $28.75 billion North East Field project in Qatar.
Also, there has been a significant rise in demand in Europe and Asia this year due to the Russian war in Ukraine, which led to sanctions and restrictions on Russian gas exports.
This comes after years of underinvestment in the oil and gas sector, as companies turned to investments related to decarbonization and renewables.