WASHINGTON — After a year of record prices for oil and natural gas, the world's energy companies are stepping up spending on exploration and production. Flush with cash, they'll spend 2006 hunting for both oil and opportunities to expand their businesses.

That's good news for consumers. It means oil companies, private and state-owned, are hunting for supplies to replace what's consumed and to meet surging global demand for oil and natural gas. Global oil consumption is forecast to grow from 82 million barrels per day now to 111 million barrels per day over the next 20 years, so much more fuel must be found simply to keep prices from rising dramatically.

Current high fuel prices have triggered a bonanza of exploration by smaller companies, which are often willing to risk more in hope of getting greater rewards. But PricewaterhouseCoopers, a major consultancy, expects the big players to spend much more, too. The world's 20 largest private energy companies are awash in $75 billion in cash, experts in the firm's Houston office estimate.

"Spending budgets will go up, and M&A (mergers and acquisition) activity will go up, too," said Rick B. Roberge, head of PricewaterhouseCooper's energy acquisitions division.

A wave of consolidation is expected in an industry already led by giant companies.

"This happens to be one of those areas, unlike others, where size really does matter," said Ken Stern, managing director of energy consultancy FTI Consulting in New York. "The sheer numbers of dollars we're talking about are the kinds of dollars that allow large companies to buy other large companies," he said, adding, "I don't think there is such a thing as a big oil company anymore. I think they are mega-companies these days."

Exhibit A: ConocoPhillips, the third-largest U.S. oil company after it was created by merger in 2002, announced on Dec. 12 that it would snap up Houston-based Burlington Resources for $35.6 billion. The move would make ConocoPhillips the largest U.S. natural gas producer. It also would ensure that it becomes a leader in unconventional energy sources, such as liquefied natural gas and Canada's synthetic crude oil, made by separating oil from natural deposits in tar sands.

Wall Street giant Lehman Brothers surveyed 325 oil and gas companies and released a report this month saying these companies expect to increase their 2006 spending on exploration and production by almost 15 percent, to $238 billion. The study predicted double-digit spending increases in U.S. and international exploration.

The stepped-up exploration is sure to increase America's dependency on energy imports. The hunt for gas and oil is happening in faraway places such as Russia's arctic north, remote central Australia and volatile African countries including Sudan, Gabon and Nigeria. Africa's west coast is one of the world's offshore drilling hot spots.

Nonconventional sources are also being tapped or eyed for development. They include natural gas drilling in Colorado and Wyoming, and oil shale deposits in the Rocky Mountain states. Oil companies also have plans for superdeep drilling in the Gulf of Mexico.

In the quest for oil, private companies are increasingly competing against state-owned oil companies from China, Russia, India and Brazil. The Lehman Brothers survey found that state-owned oil companies are also looking for partners.

Chinese state oil companies this year bought into energy projects in Canada, Ecuador, Venezuela and Kazakhstan. Oil & Gas Corp., India's state-controlled oil company, this month offered $2 billion for a stake in a Nigerian oil and gas field. State oil companies from India and China have announced plans to bid together in some places.

Together, Chinese and Indian government oil firms are spending about as much as long-established Latin America's state oil companies — or about half of what the giant private oil companies spend. Among the biggest state oil spenders next year, said the report, was Brazil's Petrobras. It's projected to increase spending by almost 69 percent as Latin America's biggest nation closes in on oil self-sufficiency.

Of the private oil giants, Chevron Corp. expects to spend more than $11 billion in exploration, production and natural gas projects next year. ConocoPhillips plans to spend $6.7 billion on exploration and production beyond the gas it acquires from Burlington Resources. And Royal Dutch Shell expects to spend $15 billion to find or pump oil and natural gas.

"Global energy needs depend on the industry's ability to sustain high levels of investment as the search for energy leads us to increasingly challenging and technically demanding environments," said Lisa Givert, a spokeswoman for Royal Dutch Shell in London.

The world's largest private oil company, ExxonMobil, which in October posted the highest quarterly profit in history at $9.9 billion, won't detail its spending plans. Spokesman Russ Roberts said ExxonMobil expects to post total capital expenditures this year of $18 billion, but won't disclose exploration plans until March.