Global upstream spending is set for a cumulative 2014-17 fall of near 50%. But Mideast NOCs are benefiting from the downturn to lower drilling costs and renegotiate development contracts.

Upstream oil and gas capital spending (capex) fell by a whopping 25% last year, to just $583bn, from $777bn in 2014, according to the IEA’s inaugural World Energy Investment Report, released 14 September.

The IEA expects a further 24% slide in 2016 to an implied $443bn, a cumulative two-year fall of...