EquityResearch3September2019FOCUSBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ThisresearchreporthasbeenpreparedinwholeorinpartbyequityresearchanalystsbasedoutsidetheUSwhoarenotregistered/qualifiedasresearchanalystswithFINRA.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE17.Restricted-InternalUpstreamSpendingSurveyUpdateGlobalSpendingTapstheBrakes,GrowthSlowsto+3%in’19;ExpectMoreoftheSamein‘20Ourmid-yearsurveyofglobalupstreamspendingacrossmorethan175companiesshowsgrowthslowingto3%in2019,adownwardrevisionfrom+8%inourJanuaryspendingreport.NorthAmericanspendingwasrevisedslightlylower(-2%)asMajorsspendingislargelyoffsettinglowerE&Pbudgets(unchangedsinceMarch),however,wenote2Hspendingwillbe15%below1H,atrendweexpecttocontinuein2020.Surprisingly,thebiggestchangewasIOCsunderspendingint’lbudgetsandafewnotableNOCreductions,trimmingoverallint’lspendingto+5%thisyear(vs.+8%previously).Offshorespendingisabrightspot,nowdownonly2%thisyear(vs.-7%previously),buildingmomentuminto2020forpotentiallythefirstincreaseinfiveyears.Wedon’texpecttohearmanybudgetannouncementsduringthe33rdBarclaysCEOEnergy-PowerConferenceinNewYorkthisweek,butearlyindicationssuggestmuchofthesamefor2020:NorthAmericaflattodown5%(privateoperatorsbeingthewildcard);int’lupmid-singledigitsdrivenbyMiddleEastlandactivity.NorthAmericaspendingtodecline2%in2019(virtuallyunchangedfromourMarchsurveybutlowerthanour+9%estimateinJanuary).E&Pssetfullyearbudgetslowthisyear(andarestickingtothemforthemostpart)withspendingexpectedtoslow~15%in2H19vs.1H19levels,whiletheMajorsincreasinglyunderpingrowthinthePermian.Spendingnextyearisanunknownatthispoint(nonehaveprovided2020guidance),butearlyindicationsareforoverallbudgetstobeflattodown5%in2020.Int’lspen...
