SEB’s 28th annual Exploration & Production (E&P) survey shows that while upstream investments will remain flat in 2026 at USD 250bn, spending will increase slightly to USD 251bn in 2027.
Exploration spending is forecast to grow by 10 per cent in 2027 as companies address declining reserves with new offshore drilling projects in West Africa and South America.
Companies are beginning to address shrinking reserves against a longer oil demand outlook, but capital discipline remains the overarching rule.
The experts expect energy markets to soften over the medium term as shipping flows through the Strait of Hormuz normalise.
Despite current elevated profitability driven by geopolitical conflict in the Middle East, major oil and gas producers remain cautious about long-term capital allocation, choosing to distribute excess earnings via dividends and share buy-backs rather than major capacity expansions.
“Oil and gas companies are enjoying exceptional profitability, yet they remain reluctant to materially increase investments”, says Kim André Uggedal, an equities analyst at SEB covering the energy sector.
Simultaneously, spending on low-carbon projects is expected to fall by nearly 15 per cent in 2026 to USD 11.5bn as higher interest rates and supply chain pressures weaken returns, forcing companies to refocus on core fossil fuel operations.
The full report and findings from SEB’s survey are only available to the bank’s equity research customers.