Douglas-Westwood, a U.K.-headquartered provider of energy business strategy, research and commercial due-diligence services, reported on "Asia Pacific Deepwater Opportunities and Challenges" in its latest edition of DW Monday.
DW Monday: Asia Pacific Deepwater Opportunities and Challenges
Our annual reports on deepwater production show Asia Pacific emerging as a high-growth opportunity – albeit from a small base – as depleting shallow water fields drive the industry into deeper waters. Deepwater currently accounts for 7 percent of regional offshore production, but prospects are for a rise to 17 percent by 2020. This will result in Asia Pacific accounting for 20 percent of the global $223 billion deepwater Capex (capital expenditure) over the next five years. Spending on drilling and completion of deepwater development wells could rise from some $400 million in 2012 to exceed $2 billion by 2017.
But this opportunity is not without its challenges. Many believe the region’s vessel fleet is not up to it, with concerns over technology which is 30 years old, and station-keeping near platforms. “It seems like this region is where the old vessels come to die” said one company executive. Technical challenges also include on-going repercussions for increased drilling equipment specifications following the Macondo incident, the need to develop HPHT (High Pressure High Temperature) reservoirs and ones with high CO2 (carbon dioxide) and H2S (hydrogen sulphide) content.
On the political front, the South China Sea could hold large reserves but is the subject of disputes between bordering nations. The need for local content also features, with some NOCs (National Oil Companies) wanting to encourage use of locally owned-rigs.
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