Special research on energy exploitation industry: Oil service: 2022 ushers in the year of capital expenditure rebound

2022 will be a great year for the rebound of oil and gas capital expenditure

It is estimated that the total global upstream exploration and development capital expenditure in 2022 will increase by 24% compared with 2021, and the total global upstream offshore exploration and development capital expenditure in 2022 will increase by 15% compared with 2021 (according to the China Oilfield Services Limited(601808) strategic outlook). Us shale oil benefited from good profit and cash flow in 2021, and capital expenditure is expected to increase significantly in 2022.

Recovery of offshore oil service industry

Since 2021, the utilization rate of international offshore drilling platforms has continued to rise, including more than 70% of jackup ship types and more than 60% of semisub ship types. The daily fee has also recovered on the whole. Specifically, shallow water is better than deep water. It is estimated that the utilization rate of offshore drilling platforms and some ship types is expected to reach around 80% in 2022, and the daily fee is expected to rise further.

Looking back on 2019, the oil service share price lags behind the oil price

Looking back on the last round of oil price cycle, from the rise of oil price from about $65 in early 2018 to the peak of 85 in October 2018, the share price of oil service stocks did not stop there. In 2019, the oil price center remained at the central level of $64, with a relatively stable trend. However, oil service stocks performed well in 2019. From the beginning of the year to the end of the year, China Oilfield Services Limited(601808) and Yantai Jereh Oilfield Services Group Co.Ltd(002353) increased by 126% and 148% respectively.

Focus on the trading opportunities of oil service stocks in 2022.

Risk tip: the risk that the oil price falls sharply and the center in 2022 is significantly lower than our expectation; Risk of insufficient willingness of capital expenditure of oil companies; Risk of rapid increase in material (such as steel) and labor costs.

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