David Paganie • Houston
Market fundamentals suggest, yes. Against the backdrop of rising US oil supplies and a stagnant global economy, one well-respected investment firm predicts a surplus of oil during the next 12-18 months which could amount to record global inventory builds. The result is a 2013 oil price deck of $65/bbl for WTI and $80/bbl for Brent, the firm noted in a recent industry brief. However, much speculation is built into the price which often overrides the fundamental supply and demand picture, and the timing and extent of potential supply disruptions are difficult to forecast.
For reference, the WTI crude oil price averaged $94.87/bbl in 2011 and $79.48/bbl in 2010, and the spot price of Brent averaged $111.26/bbl in 2011 and $79.61/bbl in 2010. The 2013 crude oil price forecast is a departure from recent averages, but likely still high enough for industry to continue to seek and extract the unconventional resources that contribute to the supply glut. US onshore plays are prolific indeed, but new production from global deepwater development is increasing as well. In fact, the biggest gains in liquid supplies for the foreseeable future are expected to come from global deepwater production.
This growth illustrates the power of new technologies, which we explore in this issue. In this month's feature report, the editors highlight technologies that are advancing resource development in three of the most prolific and prospective deepwater regions – US Gulf of Mexico, Brazil, and Australia.
Advancing deepwater development
The resurgence of E&P activity in the Gulf of Mexico is increasingly driven by deepwater plays, and operators and developers are employing a range of new technologies and applications to exploit these hard-to-reach hydrocarbon resources, according toOffshore Managing Editor Bruce Beaubouef. He suggests that GoM E&P will return to pre-Macondo levels by 2015, and much of that growth will be spearheaded by new, large deepwater fields. Beaubouef's feature begins on page 34.
Jeremy Beckman, Offshore Editor-Europe, in his special report on Brazil offshore, highlights one of the emerging powerhouses in the region – Repsol Sinopec – in a one-on-one interview. Beckman's interview highlights the rationale behind the joint venture, and its growth plans for Brazil in the coming years. Earlier this year, the JV hit a 500-m (1,640-ft) thick oil column in the Campos basin offshore Brazil. The Pão de Açúcar discovery well is in block BM-C-33, in 2,800 m (9,186 ft) of water. José Maria Moreno, CEO, Repsol Sinopec Brasil, told an audience in Rio last month that the industry's technological limitations will be tested in the areas of moorings, risers, and flow assurance as the JV seeks a feasible development solution. One option is a standalone development, which, if selected, would be a world-record for water depth. Beckman's full interview begins on page 40.
Offshore Australia-based contributing editor Wendy Laursen discusses how companies such as Woodside, Chevron, and Santos are pushing technology development to overcome the region's inherent challenges. Her report begins on page 44.
Elsewhere, East Africa's offshore continues to emerge as a promising deepwater province. However,Rory Lamrock, Intelligence Analyst, AKE Intelligence, Lloyd's of London, suggests that the increase in offshore exploration there could provide new and attractive potential targets for maritime criminals. Lamrock issues a word of warning in the Beyond the Horizon editorial on page 112.