Offshore is back: large greenfield investments expected

As global fossil fuel demand remains strong and countries look for carbon-friendly production sources, offshore is back in the spotlight. Offshore activity is expected to account for 68% of all sanctioned conventional hydrocarbons in 2023 and 2024, up from 40% between 2015 - 2018. Comparisons against this period are prudent as it predates the Covid-19 pandemic and related oil price crash. In terms of total project count, offshore developments will make up almost half of all sanctioned projects in the next two years, up from just 29% from 2015-2018.

These new investments will be a boon for the offshore services market, with supply chain spending to grow 16% in 2023 and 2024, a decade-high y/y increase of US$21 billion. Offshore rigs, vessels, subsea and FPSO activity are all set to flourish.

One of the leading global drivers is the sizable expansion of offshore activities in the Middle East. For the first time, offshore upstream spending in the region will surpass all others, lifted by mammoth projects in Saudi Arabia, Qatar and the UAE. The area’s offshore spending growth looks set to continue at least for the next three years, growing from US$33 billion this year to US$41 billion in 2025. These countries are tapping into their vast offshore resources to meet rising global oil demand, backed by the necessary capital and infrastructure to outpace other producers.

“Offshore oil and gas production isn’t going anywhere, and the sector matters now possibly more than ever. As one of the lower carbon-intensive methods of extracting hydrocarbons, offshore operators and service companies should expect a windfall in the coming years as global superpowers try to reduce their carbon footprint while advancing the energy transition,” says Audun Martinsen, Head of Supply Chain Research with Rystad Energy.

Read the article online at: https://www.worldpipelines.com/special-reports/09032023/offshore-is-back-large-greenfield-investments-expected/