Worldwide spending on upstream equipment and services will increase 8% this year to $72 billion and climb another 21% to $87 billion in 2001, Tulsa-based oilfield market research firm Spears & Associates Inc. forecasts. Of the 34 market segments it tracks, 29 will experience increased revenues, while five will continue to fall this year, the firm predicts. However, Spears expects 2001 spending to increase from 2000 in all 34 oilfield equipment market segments. In its new oilfield market report, the firm confirms that higher oil and gas prices are fueling increased spending by producers, particularly on North American drilling, completion and production-related services and equipment. For example, it anticipates that onshore drilling, which is closely tied to U.S. and Canadian spending, will climb 35% this year to $5.9 billion. Pressure-pumping services will be up 35%, increasing to $5.9 billion. But it emphasizes that 2000 has not been a recovery year for all oilfield segments. Offshore construction services were hit hardest, with expenditures expected to drop 22% this year from 1999. Outlays for manufactured drilling and rig equipment manufacturing will fall 13% this year, while geophysical equipment and services, a $3.5-billion business, will fall another 9%. Looking forward to 2001, Spears expects the greatest recovery to be experienced by drilling-related service and construction providers. -Petroleum Finance Week