Deepwater expenditure to average over $27 billion annually through to 2013
A new study to be published shortly by energy business analysts Douglas-Westwood, “The World Deepwater Market Report 2009-2013” forecasts that, despite current oil price concerns, the deepwater oil & gas sector will spend an average of over $27 billion annually during the period 2009 to 2013.
Speaking at the Deep Offshore Technology Conference in Perth, Australia, today, John Westwood, Chairman of Douglas-Westwood stated that, “Although we expect some small decline in 2009, thereafter, the deepwater oil & gas industry is set for renewed growth, with annual Capex reaching nearly $31 billion in 2011. This is a 45% growth for the 2009-2013 period compared with the previous five years. Deepwater currently accounts for over 15% of total offshore oil production, but over the next few years its relative share will rise to over 20%.
“Africa is expected to be the leading deepwater development area by far, accounting for nearly 40% of the global spend. Since the first deepwater ‘elephants’, Africa has emerged as perhaps the most significant deepwater region in the world, with some stunning successes in recent years, such as Girassol, Xikomba and Kizomba.
“Latin America’s deepwater activity is dominated by Brazil with its national operator Petrobras who has pioneering the use of innovative technology to achieve production from tremendous water depths. Overall, the region is expected to account for nearly 20% of world deepwater development spend over the 2009-2013 period. Beyond 2013, we expect Brazilian spend to reach new heights as the recently discovered ‘pre-salt’ giant fields are developed.
“Over the next five years, North America is expected to attract a similar share to Latin America. With a few notable exceptions, deepwater fields in the US Gulf of Mexico tend to be smaller than those in other deepwater ‘hotspots’ such as Brazil or West Africa. The region’s extensive offshore infrastructure and the relative proximity of supply and service centres have a significant positive influence on E&P activity, turning otherwise marginal prospects into viable commercial propositions.
“The ‘Golden Triangle’ of Africa, Gulf of Mexico and Brazil will account for three-quarters of global deepwater expenditure over the forecast period. However, the emergence of Asia as a significant deepwater region should not be overlooked. Indonesia, Malaysia and India all have development prospects on screen for the 2009-2013 period and the region should account for nearly 10% of deepwater Capex. Western Europe, will maintain its market share but growing activity will see actual expenditure increasing over 30%.
“In terms of hardware, floating production systems will grow from 22% of historic spend to 28% over the forecast period. Surface wells’ share is set to decrease from 4% to 1%, with all other components, including subsea wells remaining stable. Combined, subsea wells and platforms, at $92 billion, are forecast to represent 67% of expenditure.
