The World Deepwater Market Forecast, soon to be published by energy analysts Douglas-Westwood, forecasts continued growth in the deepwater sector with annual expenditures reaching over $24.6 billion by 2012. The key findings of the study in conjunction with related information from The World Offshore Drilling Spend Forecast and The World Oil and Gas Forecast indicate that an enormous amount of activity lies ahead.

Deepwater oil and gas production is increasing rapidly, and output is expected to increase by almost 80% over the period to 2011. From 4.5 MMb/d in 2007, deepwater oil production will grow to nearly 8 MMb/d in 2011, while deepwater gas production will increase from 1.6 to over 3 MMboe/d over the same period.

To put this in context, deepwater oil production now accounts for almost 15% of total offshore oil and gas production, but over the next few years, its total share relative to shallow-water output will grow, accounting for around 20% of offshore production by 2011.

Africa is expected to be the leading deepwater development area over the 2008-2012 period, accounting for nearly 40% of the global deepwater spend. Since the first brace of deepwater “elephants” - Shell’s Bonga in OPL 212 off Nigeria and Total’s Girassol in block 17 off Angola, discovered in the spring of 1996 - Africa has emerged as perhaps the most significant deepwater region in the world, with some stunning successes. The first floating production system to be installed in Africa’s deepwater was Total’s landmark Girassol FPSO on the Girassol field off Angola in 2001. This was followed by ExxonMobil’s Xikomba in 2003 and then Kizomba A’s TLP and FPSO.

Click here to enlarge image Deepwater oil and gas production 2002-2011. Source: The World Offshore Oil & Gas Forecast 2007-2011, Douglas-Westwood (Energyfiles Ltd.).

There are a variety of deepwater development prospects on the radar for the period to 2012, including Shell’s Bonga South West and ExxonMobil’s Bosi; projects include Chevron’s Agbami and Total’s Akpo and Usan/Ukot - all of which lie offshore Nigeria.

Offshore Angola, BP is making good progress with its Greater Plutonio development in block 18. The company also has development plans for the series of discoveries in block 31. ExxonMobil is developing the Mondo, Saxi, and Batuque discoveries within the Kizomba C FPSO development. In addition, Norsk Hydro and Sonangol are developing the Gimboa field and Chevron the Negage field, both via FPSOs.

Click here to enlarge image Deepwater capex by region 2008-2012. Source: The World Deepwater Market Forecast, Douglas-Westwood.

With so much activity occurring off Nigeria and Angola, it is easy to overlook Egypt’s emerging deepwater status. In the West Delta Deep Marine (WDDM) Concession, BG has enjoyed some spectacular exploration successes. These, along with the Saffron/Scarab development, have allowed BG to establish itself as one of the industry leaders in adopting subsea production technology. The Saffron/Scarab development marked Egypt’s first subsea completion, not to mention one of the world’s longest subsea tiebacks.