Investments in the global upstream oil and gas industry projects are projected to rise by 3% to $450bn in 2017, according to a report by research and consultancy group Wood Mackenzie.
The research firm forecasts the investment cycle to show signs of growth this year after a gap of more than two years.
It estimates final investment decisions (FIDs) on the upstream projects to double in 2017, compared with 2016.
Wood Mackenzie Upstream Oil and Gas principal analyst Malcolm Dickson said: "2017 will demonstrate how efficient the oil and gas industry has become; showing projects in better shape all round."
According to Wood Mackenzie's 2017 global upstream outlook, there will be an increase in global investment in the sector, reversing two years of severe decline.
Dickson said: "The global investment cycle will show the first signs of growth in 2017, bringing the crushing two-year investment slump to a close.”
Wood Mackenzie also estimates that over 20 final investment decisions (FIDs) will be made for upstream oil and gas projects in 2017, which is more than double compared with nine in 2016.
Additionally, the projects will have capital expenditure averaging $7 per barrel, the report said.
Dickson added: "Companies will get more bang for their buck as development incremental internal rates of return (IRR) will jump from 9% to 16%, comparing 2014 to 2017.
"This is in part a result of a shift in capital allocation away from complex mega projects towards smaller, incremental projects in the Canadian oil sands and deep water."
The firm also predicts that there’s a potential for further improvement in drilling speed of 20% to 30% in some early-life tight oil plays.
Although the new projects slated for FID in 2017 are largely looking good, the longer-term deepwater pipeline is more challenged, it added.
Wood Mackenzie global fiscal research senior vice-president Graham Kellas said: "Some governments will be tempted to increase tax rates, but those with uncompetitive fiscal regimes will have to make changes to ensure they can attract still-scarce new capital.
“Getting the risk-reward balance right will be a critical factor in attracting scarce investment capture in 2017, even for resource-rich hotspots such as Iran and Mexico."