Global investments in the upstream sector have been given a slight boost for the first time in recent years, according to a report from the International Energy Agency (IEA).

The Paris-based agency said in its most recent World Energy Investments report on Tuesday that global energy investment stabilised at near $1.85 trillion after three years of decline.

Last year, oil and gas companies spent close to $477 billion on upstream developments, a 4% rise in spending compared to the previous year.

The boost, the IEA said, was “underpinned by a higher oil price and a shift to shorter-cycle projects and shale”.

“The last three years (2016 to 2018) saw very low levels of conventional oil and gas resources being sanctioned for development. Approved conventional oil resources averaged 7 billion barrels of oil equivalent, 60% lower than the previous five years, while conventional gas resources, at 8.3 billion boe, were 40% lower,” the report read.

But looking at the full year this year, the IEA estimates global upstream investments at $505 billion, a 6% increase in nominal terms on the previous year.

Nevertheless, “three years of modestly higher spending still leave this figure nearly $300 billion lower than the peak reached in 2014,” the IEA added.

“Guidance from companies suggests that an acceleration in new project approvals is indeed possible in 2019…many of these are offshore in the Gulf of Mexico, Guyana, the North Sea, and Brazil as well as large integrated liquefied natural gas projects,” it said.

While the main upstream story of the last few years has been a shift in spending towards shale (tight oil and shale gas) in the US, according to the IEA, spending plans for 2019 point to a potential new wave of conventional projects.

“The investment landscape for shale remains dynamic with the arrival at scale of the majors, but this is being offset by a more subdued outlook for most of the pure shale players, for whom the priority is now to live within their means,” the report said.

“The signs in 2019 are that the balance of spending is starting to shift again. In our assessment, the fastest growth in upstream investment this year is set to be in conventional projects, rather than in shale,” it said.

However, even as investments stabilised, approvals for new conventional oil and gas projects “fell short of what would be needed to meet continued robust growth in global energy demand”, the IEA said.

In addition, at the same time, “there are few signs of the substantial reallocation of capital towards energy efficiency and cleaner supply sources that is needed to bring investments in line with the Paris Agreement and other sustainable development goals”, the report said.

“Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies,” the IEA’s executive director, Fatih Birol said.

“But the bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner energy technologies to change course. Whichever way you look, we are storing up risks for the future.”

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Global upstream investment gets a boost: IEA