The offshore rig owner fraternity – bruised and battered after concurrent years of painfully low utilization rates – can finally see the silver lining around those dark clouds as more than $100 billion worth of offshore projects are expected to be sanctioned in 2019. And this greenfield investment level looks likely to be repeated in 2020, and yet again in 2021.
When faced with the challenge of lower oil prices, the offshore industry responded by cutting costs and sanctioning fit-for-purpose work scopes. Unit price reductions, efficiency gains and scope reductions have combined to slash breakeven costs for both deepwater and shallow-water fields by more than $30/bbl from their 2013-14 levels. The industry appears to have ridden out the storm of the latest downturn and is ready to start a new wave of project sanctioning.
– Oddmund Føre, VP, Rig research, Rystad Energy