GCC national oil companies (NOCs) are expected to take a more cautious stance on spending amid operational expansion and diversification plans, according to an S&P Global note. Gulf NOCs’ spending is estimated to average around USD 115-125 bn between 2025-2027, up from USD 110-115 bn in 2024.

Megaprojects’ completion hits the brakes on growth

Behind the slowdown: Players are expected to slow the growth of their capital spending as major capacity expansion projects near completion and production from recent megaprojects comes online, the note said. While overall capex will remain high due to investments in production capacity, moderating spending allows GCC NOCs to manage liquidity, protect credit quality, and reduce pressure on the oilfield services sector.

The reduction might impact other elements: A more cautious spending approach is expected to reduce rig demand, stabilize average day rates, and put pressure on the profitability of the region’s oilfield service providers, according to S&P. However, industry consolidation may help rebalance rig supply and demand.

Gulf NOCs aim to level up their value chain and upstream operations

GCC NOCs expected to focus on enhancing their value chain and boosting upstream activities. The regional capex is expected to rise due to capacity expansion plans in the UAE and Qatar, as wellcapacity maintenance in Saudi Arabia. Gulf players will continue to focus on upstream activities, particularly exploration and production. They are also pursuing better integration across the value chain through trading and ensuring a more reliable flow of feedstock from upstream to downstream operations.

REMEMBER- Adnoc set a target to increase production capacity to 5 mn bbl / d by 2027, as part of its expansion strategy. Meanwhile, Aramco focuses on maintaining and effectively utilizing its sizable output base, with its leadership previously stating that the firm can sustain a maximum crude oil production capacity of around 12 mn bbl / d.

LNG and renewables are key for the next stage of growth

Renewables and downstream boosts are the main highlights of the ongoing diversification efforts. The regional NOCs plan to continue increasing their renewables deployment, as well as acquiring stakes in clean-energy leaders. They also aim to continue expanding their green energy portfolios through increased low-carbon hydrogen capacity and LNG expansion.

Investments in gas projects and expanding international operations are also being ramped up. Adnoc’s low-carbon investment unit XRG acquired a 10% stake in Mozambique’s Rovuma basin and inked a production sharing contract for Turkmenistan’s Block I gas, with a plan to establish a top-five integrated global gas and LNG business.

What’s next?

Looking ahead, oil price forecasts are highly uncertain: Opec+ decided to pause production increases throughout 1Q 2026, after the significant unwinding of its production cuts last year. The International Energy Agency warned of a potential global oil glut throughout the past few months, while JPMorgan flagged that oil prices could drop severely to USD 30 per barrel in 2027. Meanwhile, the market remains sensitive to both geopolitical developments and regional economic conditions.

Spending plans aren’t expected to be disrupted by moderately lower oil prices in the near term, as the companies have adequate financial buffers to absorb price fluctuations. Conservative spending approach is likely to keep day rates for regional oilfield service providers in check, pushing these firms to prioritize cost reductions and strengthen cashflow resilience.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

Tags: