Save for later Print Download Share LinkedIn Twitter The Mideast is poised to take on the upstream capital spending growth mantle from the North American onshore, signaling an inflection point in global investment. US shale is not done growing, but capital discipline, maturing basins and industry-leading cost inflation will constrain that growth, making the expansion plans of Saudi Aramco and Abu Dhabi National Oil Co. (Adnoc) in particular all the more critical to watch.Market observers are closely monitoring the US onshore to quantify shale’s growth potential in a more confined and somewhat less capital-efficient future amid inflation and drilling inventory degradation. Services giant Baker Hughes sees “range-bound activity” in North America this year, while SLB flagged expectations of a plateauing rig count, even as capital spending rises by double digits versus 2022.Crucially, this shift marks the start of a multi-year inflection point in North American production capacity growth. Energy Intelligence still sees the region adding roughly 1 million barrels per day of fresh crude capacity this year and next, but that quickly peters to 690,000 b/d in 2025 and just 140,000 b/d in 2027.Enter the Mideast. The region is set to average annual additions of 600,000 b/d over 2023-27, per the Energy Intelligence Upstream Investments Tracker, in a more balanced rollout that will still top 700,000 b/d in 2027. To get there, Aramco, Adnoc and a mix of international oil companies and Iraqi state firms are already priming the pump. SLB noted a shift in activity levels between the third and fourth quarters of last year; it sees record investment from the region ahead via oil and LNG capacity additions, delivering bumper revenues for SLB and margins exceeding 2014 peaks. Baker Hughes concurs the Mideast upstream has “the most promising outlook.”The services commentary speaks to the seriousness of the spending plans of Aramco and Adnoc in particular — commitments SLB CEO Olivier Le Peuch insists will be “resilient” to any wider forces, including decarbonization. Indeed, while the pair boast net-zero operational emissions targets and are championing carbon capture and hydrogen, their ability to add billions to budgets rather than horse-trade to cover other obligations sets them apart. Aramco’s capex is set to rise to $40 billion-$50 billion this year ahead of further growth; Adnoc’s $150 billion capex program across 2023-27 implies record spending.The upstream programs in play are multi-faceted, covering onshore, shallow and deepwater, and will have to navigate structurally tighter services capacity as providers deploy their own brand of capital discipline. Investments are also having to compete with non-energy initiatives that are absorbing regional engineering and procurement capabilities. At this stage, we do not see material risks to the Mideast upstream buildout. But with global spare oil capacity set to remain tight, all eyes will be on the region’s ability to execute.