New projects in the upstream oil and gas industry will double in 2017, according to WoodMackenzie's latest report on Wednesday.
The research and consulting firm said the investment cycle will show the first signs of growth in 2017 since 2014, and final investment decisions will double compared to 2016.
"2017 will demonstrate how efficient the oil and gas industry has become, showing projects in better shape all round," said Malcolm Dickson, a principal analyst for upstream oil and gas for Wood Mackenzie.
According to the outlook, confidence will start to return to the sector, with exploration and production spend set to rise by 3 percent to $450 billion.
"Though a corner is being turned, this is still 40 percent below the heady days of 2014. At the forefront of the revival will be the U.S. tight oil," the report read.
It noted that the costs will continue to fall in 2017, though only marginally.
"But for all the pain of the downturn, a leaner industry is starting to emerge," the company added.
WoodMackenzie has made the following five predictions for 2017:
· Global investment will rise, reversing two years of severe decline
· Final investment decisions will double and deep water will be back on the agenda
· Costs will bottom out as an efficiency boom takes hold, but more work is required
· Fiscal rules need to improve to attract scarce investment
· Rise in global investment in 2017 after two years of severe decline
"The global investment cycle will show the first signs of growth in 2017, bringing the crushing two-year investment slump to a close," Dickson said.
Wood Mackenzie forecasts that the number of final investment decisions will rise to more than 20 in 2017, compared with nine in 2016. This is still well short of the 2010-2014 average of 40 a year.
"But these are generally smaller, more efficient projects, and capex per barrel of oil equivalent (boe) averages just $7 per barrel, down from $17 per barrel for the 2014 projects," it noted.
By Murat Temizer