Thanks to Saudi Aramco’s $18 billion worth of project commitments with the Marjan and Berri expansion projects, overall offshore project sanctioning is set to surpass the $50 billion mark in the first half of 2019. Later this year, the Hail and Ghasha sour gas projects are expected to be sanctioned. Once that occurs, four of the top 10 offshore projects since 2014 will have been sanctioned this year.
To reach the predicted $123 billion of potential project commitments this year, some operators will need to reduce costs. Over 40% of projects remaining to be sanctioned in 2019 have breakeven prices above $50/bbl. Whether enough of them will receive funding will determine if the prediction continues its mounting ascent or turns into a flight of fancy.
– Matthew Fitzsimmons, VP, Oilfield Service Team, Rystad Energy