Deepwater capital expenditure has nosedived since the oil-price crash of 2014 and has not quite recovered because of the high level of break-even prices required, but some oil companies maintained their interest in the sector and went ahead with big-ticket projects anyway. Most believe the sector has bottomed out.
Brazil’s presalt region is among the areas driving deepwater oil and gas development, while others struggle with costs and technical complexity. So, in a low-oil-price environment, are such deepwater projects viable?
The major players in the deepwater market have made significant efforts to minimize costs and increase efficiency, thus shaping 2019 capital budgets.
That means activity levels in 2019 likely will mimic those of 2017–18, with perhaps some small gains from small operators taking advantages and looking for opportunities in the current low-cost environment.
However, the situation is darkened by global market pessimism. Adding to this, operator project-execution decisions have been delayed and lack of commitment and direction has caused operators to delay deepwater projects and leave the pipeline of future work empty.
Even if operators do make decisions in late 2019 to go forward with these projects, the projects are unlikely to commence until late 2020 or even 2021.
Royal Dutch Shell is considering only the Gulf of Mexico in their strategic deepwater development going forward to 2020 and beyond, and, despite low oil prices, Shell is advancing its Kaikias, Appomattox, and Coulomb Phase 2 projects in the deepwater Gulf of Mexico, reducing break-even costs and cycle times.
Through the forecast period, Africa and the Americas will continue to lead the deepwater market, accounting for 79% of forecast expenditure.
Floating production, storage, and offloading vessels will continue to dominate the floating production and storage (FPS) market, with a total of 33 deepwater units (out of 41 FPS units in total) expected to be installed during the 2018–22 period, representing 78% of FPS expenditure.
This Month's Technical Papers
Recommended Additional Reading
OTC 28872 Changing Landscape of Deepwater-Field Developments by Marcel M. Landwehr, Subsea 7, et al.
OTC 29043 The Giant Lula Field: World’s Largest Oil Production in Ultradeep Water Under a Fast-Track Development by Marcelo Becher Rosa, Petrobras, et al.
SPE 191960 Early-Stage Detection of Scales in a Deepwater Field Offshore Ghana Through Remote Monitoring of Multiphase Meter by Mahdi Darab, OneSubsea, et al.
|Morten Iversen, SPE, graduated from the University of Stavanger in 1981 and has worked throughout the world for different operators and for several service companies. He works as the Well Integrity Section head for Karachaganak Petroleum Operating. Iversen holds several patents, including a patent for a tubing-conveyed perforating-shot detection system and a deepwater blowout-preventer system for riserless light well intervention (RLWI). He has worked on implementing the RLWI technology from its infancy in the late 1980s and later as a global subsea adviser for Welltec, optimizing the use of RLWI technology to increase well recovery in subsea wells. Iversen serves on the JPT Editorial Committee and can be reached at email@example.com.|
Morten Iversen, SPE, Well Integrity Section Head, Karachaganak Petroleum Operating
01 May 2019
Asphaltenes: A Complex and Challenging Flow Assurance Issue To Measure and Quantify Risk
Researchers use novel methodology to measure the thermo-electric properties of native crude.
Prophets of doom have argued that there will be no cyclical upturn this time, that conventional offshore oil and gas developments, with the odd exception, have been squeezed out of the cost curve by the rise of tight oil. Yet there are signs of recovery that might breathe life back into the sector.
Offshore Enters Uncharted Waters
For the offshore sector, the collapse in oil demand and prices came just as the market was beginning to look up. Now many companies are focused on survival. This article discusses how various market segments, regions, and companies are faring in “the new reality.”
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