Project sanctions set for highest level in five years, with offshore oil and
gas production to rise, report says
The total value of offshore projects that are set to reach a final investment decision this year is expected to burst through the $100 billion barrier for the first time in years, according to data from an offshore market analysis firm.
Awards for floating production, storage and offloading units as well as subsea trees are also set to rise, with offshore oil production also seen on the up, according to UK-based Clarksons Research.
Managing director Steve Gordon said: “While the offshore fleets still face overcapacity headwinds, we expect offshore final investment decisions to continue to recover and exceed $100 billion in 2018 for the first time in five years.”
Last year saw a 40% year-on-year rise in offshore FIDs – albeit from a low base in poor market conditions – to $80 billion, data from Clarksons Research showed.
“We also anticipate a further pick up in FPSO awards and subsea tree awards through 2018,” Gordon continued.
Last year saw 11 mobile offshore production unit awards, with this seen increasing to 14 this year. Last year saw 176 subsea tree awards, up from 124 in 2016, although Clarksons Research did not provide a projected 2018 figure.
Offshore oil production is set to increase by 2.3% this year to 26 million barrels per day, representing 28% of total global oil output, the research said.
Offshore gas production is projected to hit 120 billion cubic feet per day this year, representing a third of all global gas output.
“Offshore oil and gas continues to plays a vital role in meeting 17% of all global energy demand,” Gordon added.
This article was originally published on upstreamonline.com