Douglas-Westwood, Energyfiles predict offshore spending will grow

Despite the global recession, offshore spending is expected to grow strongly, from $578 billion capex and $379 billion opex over the last five years to $807 billion capex and $549 billion opex over the period to 2013, according to the World Offshore Oil & Gas Production and Spend Forecast 2009-2013, published today by Douglas-Westwood and Energyfiles.

Offshore staff

CANTERBURY, UK -- Despite the global recession, offshore spending is expected to grow strongly, from $578 billion capex and $379 billion opex over the last five years to $807 billion capex and $549 billion opex over the period to 2013, according to the World Offshore Oil & Gas Production and Spend Forecast 2009-2013, published today by Douglas-Westwood and Energyfiles. Exploration for fresh oil and gas supplies and development of existing and newly found accumulations from demanding reservoirs in new extremes of environment, are expected to drive offshore industry spends.

Sourced from data in the Energyfiles Global Databases, the report shows that in 2008 offshore oil production was nearly 10 Bbbl or 34% of total production, while offshore gas production rose to nearly 6 Bboe, equaling 29% of all gas production (it stood at 9 Bbbl and under 4 Bbbl equivalent respectively in 2000). Higher oil prices – which are double what they averaged five years ago – stimulated investment leading to equipment and personnel shortages as demand soared. Costs increased for most consumables and services, especially high technology services, more than ever in 2005 to 2007, according to the report.

“Historically, global economic recessions have led to declining energy demand, but the resultant lower prices have soon led to a recovery in demand and then prices, especially as OPEC has acted to rein in output to tighten supply,” says Dr. Michael R. Smith of Energyfiles.” Thus in early 2009 the supply/demand balance for oil had already stabilized, despite the worsening recession. Our analysis points to stability within the offshore industry in 2010. In 2011, a return to growth is forecast. Many more challenging and expensive projects must be brought onstream – and most of the high technology sectors of the offshore industry remain equipment and people resource-constrained.”

08/10/2009

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