Technology Editor, Subsea & Seismic
PERTH, Australia --At the opening ceremony today of the Deep Offshore Technology International Asia/Pacific, an industry perspective presented by John Smith, CEO of Clough addressed the question of whether deep offshore operations were feasible not from a technology viewpoint but from a market viewpoint. His conclusion was "yes."
"The 'how' is interesting and compelling but may not be the critical question today," Smith said. "'How' is feasible, so the crucial question is 'if'. If the answer is 'no', 'how' is not relevant."
Smith said a combination of factors build to the positive conclusion about the future of deepwater upstream oil and gas operations. Those factors include:
• Population and GDP growth, particularly in the Asia/Pacific region, drive demand
• Hydrocarbons will dominate the supply for the medium term
• Peak oil concerns also drive prices higher
• Gas is plentiful and the demand for it is increasing
• Remaining substantial reserves are in deepwater
• The Asia/Pacific region is increasingly important in both demand and supply of gas
• Substantial deepwater projects will be built in Australia, Malaysia, and Indonesia
• Asia/Pacific is part of a global deepwater business.
Looking at the statistics, Smith cited reports that global spending will rise from $254 billion in 2007 to $316 billion in 2012, and that deepwater is the key sector for new discoveries. Along with that, exploration spending in Asia/Pacific has jumped from about $5.5 billion in 2005 to just under $12 billion in 2007.