Offshore Project Commitments Set for Record Boost
According to a new Rystad Energy report, offshore project commitments are expected to not only recover going forward but their number is also set to reach a new record in the five-year period towards 2025.
The report showed that the commitment count is forecasted to hit 592 projects from the beginning of 2021 up until the end of 2025, with growth expected across shallow water (0-410 feet), deepwater (410-4,921 feet) and ultra-deepwater (beyond 4,921 feet) depth levels. Total offshore project commitments declined during 2016-2020 to 355 projects, from 478 during 2011-2015, Rystad highlighted.
Shallow water commitments are expected to take the largest share of the total offshore project pie, rising to 356 from 206 in the last five years, and 323 projects during 2011-2015. The number of deepwater projects is forecasted to rise to 181, from 106 in 2016-2020 and 115 in the five years before that. Rystad noted that it was expecting about 55 ultra-deepwater projects from this year until 2025, which it outlined was up from 43 in the previous five years.
Ultra-deepwater activity is projected to be primarily concentrated in South America, with over 50 percent of the total committed value, while the Middle East is likely to lead shelf developments with 40 percent of the total value, Rystad highlighted. Deepwater investments are forecasted to be less dependent on any particular region, with a quarter of greenfield expenditure expected in Europe.
“The growth in commitments will stimulate rising demand for floating production, storage and offloading vessels as well as subsea tiebacks,” Rajiv Chandrasekhar, an energy service analyst at Rystad, said in a company statement.
“The search for large new fields in deep and remote waters became much more economically viable after dayrates for drilling rigs and offshore supply vessels fell in the wake of the oil price crash in 2014 and 2015. This offers significant support for companies interested in deepwater,” he added.
For the purpose of its analysis, Rystad defined that a project is committed when more than 25 percent of its overall greenfield capital expenditure is awarded through contracts.
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