PROJECT AND MARKET TRENDS
Oil Price Spike Could Send Service Company Margins Higher
The recent jump in oil price could create additional momentum for margins in the service sector. With shale euphoria wearing off, service company margins are still showing some resiliance. If the price hike persists into 4Q 2019, increased activity could improve pricing further.
Operating Excellence Through Benchmarking in Upstream Operations
As companies have focused on giant capital investments onshore and offshore to drive growth, they have often focused less on field operations, especially OPEX. This represents an enormous opportunity to address profit squeeze by improving overall cost efficiency in oil and gas projects.
Subsea Markets Face High Stakes if Oil Prices Slide
In a $60 to $70 oil environment, the subsea market is poised to grow around 7% annually up to 2025. But a significant portion of this activity is at risk if the price of Brent crude falls to $50 per barrel.
Price and Cost Risks Drive Race To Secure FID, FEED, and Contractors for Global LNG
Approximately $200 billion in projects worldwide are racing to be approved over the next 2 years. The race is not just to make FIDs on projects, but also to enter FEED work to lock in contractors before others do.
Africa Takes the Lead in Record Year for LNG
Driven by Mozambique’s Area 1 and Area 4 projects, Africa is poised to become the dominant LNG investment destination by the end of this year, with the continent seeing nearly one-third of total greenfield investment.
The Opportunity and Threat Posed by US Shale Water
The well count and completion intensity of US tight oil and gas operations have grown in recent years, and rising pressure from environmental regulations means that produced water management has become a key focus for operators.
Service Companies Show Pricing Power Growth
New analysis from Rystad Energy shows service companies are beginning to raise prices after seeing a significant drop following the oil price downturn. Pricing power is projected to keep rising in 2020 as the service industry sees more demand across the supply chain.
Weld Overlay Joins the Party as Corrosion-Resistant Pipe Undercapacity Threatens Project Scheduling
It is rare that businesses selling equipment to the oil and gas sector can benefit from lower oil prices. But that is the case for CRA pipe manufacturers, which are comfortably outperforming 2014 levels.
US Exceeds One-Year Mark as Natural Gas Exporter
An EIA report shows natural gas exports reaching 4.6 Bcf/D in February, the 13th consecutive month in which the country's natural gas exports exceeded its imports. Exports are projected to reach 7.5 Bcf/D by 2020.
Successful D&A Means Seeing the Unseen
Decommissioning and abandonment comes with its share of unexpected surprises, but many of those surprises could be avoided merely through better planning and care.
D&A: The Asia-Pacific Offshore Industry’s Next Big Challenge
The next big wave of decommissioning and abandonment projects is set to occur in the Asia-Pacific region, and APAC’s operators are now tasked with finding cost- and time-effective ways of unwinding their huge agglomeration of wells and facilities.
UK Offshore’s Big Challenge: Growing While Plugging More Wells Than They Drill
The outlook in the UK is a case study of the squeeze facing E&P in other basins where operators are trying to pay to sustain production with discoveries, while plugging and abandoning old wells, all paid for by the lean cash flow due to low oil prices.
Subsea is Back in Black
From its record high in 2014, purchases of subsea equipment and SURF fell around 50% until reaching a low in 2018. New data suggest that the subsea market will be a top-performing oilfield service segment.
Are Deepwater Projects Due for a Revival?
The oil price downturn spawned a lull in deepwater enthusiasm, but better project execution and reduced project lead times have helped operators achieve lower costs and better returns. What does the landscape for deep water look like in the near term? Will operators get more involved?
Subsea Production Systems—Will 2019 Be a Tipping Point?
The past year ended with a surge of subsea tree awards as E&P operators locked in lower supply-chain cost. Will demand continue to grow in 2019 and allow subsea OEMs to build backlogs and take back pricing power?
Take 10—Are You Ready for 2019?
Cautious optimism is in the air across the oil and gas landscape as oil prices have risen back into the mid-$50s in the past month. Here are some oil and gas industry themes to think about as you head into 2019.
To Sanction, or Not To Sanction—That is the Offshore Question
2019’s class of offshore projects show a wide range of potential sanctioning outcomes.
Dawn of the Drone: A New Method for Delivering IRM Services Subsea
Subsea inspection/repair/maintenance services have traditionally relied on vessel-based, ROV, or diver operations. In the longer term, identifying significant incremental savings in these operations is not sustainable and an innovative approach deploying digital technologies is being investigated.
Sustained Subsea Hardware Investment Projected for Near Term
Westwood forecasts a recovery in the subsea market backed by a new wave of offshore investment. Subsea vessel operations and hardware expenditure are expected to total $152 billion from 2019 to 2023.
FPSO Market Set To Rebound Over Next Three Years
A report from Rystad Energy shows a near-term boost in the global floating production market, with more than 30 new FPSO projects possibly reaching sanction from 2019 to 2021.
Upstream Natural Gas Capex Forecast To Peak in 2025
Gas is forecast to overtake oil as the world’s primary energy source in 2026. LNG, with capacity expected to double by the late 2040s, will connect the shifting sources of gas with changing demand centers.
Machine Learning and AI Streamline Automated Maintenance Reviews
Machine learning and artificial intelligence technology offer offshore operators the chance to automate high-cost, error-prone tasks to avoid the effects of inconsistency and errors in analysis, improving efficiencies and safety.
North American Shale Activity Gives Boost to OFSE Business
The oilfield services and equipment sector, while optimistic, has not yet seen the effects of the improved oil price in the recovery of its overall business.
Oil and Gas Projects Worth $110 Billion are Coming Off the Back Burner
The oil and gas industry has vastly accelerated the pace of approving investments for new projects over the past 18 months. New facilities worth more than $110 billion have been approved for development since the beginning of 2017 vs. only $50 billion in 2016.
New Regulations To Fast-Track Brazil FPSO Deployment, Boost Presalt Oil Production
New local content regulations could speed up the pace of presalt oil production by more than 21 billion bbl by the mid-2020s. Karoon and Parnaíba Gás Natural are the first companies to apply to change their contract terms. Petrobras, Shell, BP, ExxonMobil, Petrogal, and Anadarko are also interested.
The Benefits of Flying Unmanned Aircraft Vehicles at Scale for Asset Managers
Ground sensors on assets over a broad area have limited returns on investment if the asset life cycle is less than 10 years, and obsolescence of the technology if it exceeds 10 years. Complementing sensors with aerial remote sensing at scale may help to mitigate these issues.
Financing FLNG Facilities—What Lies Ahead?
Although the FLNG concept has been around for decades, only three units are in the water and operational or under commissioning as of 2018. As the mitigation of technological risks is demonstrated, commercial risks become the focal point and the challenge to financing the capital-intensive projects.
Where are We in the OFS Cycle?
Oil prices have recovered somewhat and operators are making money again. So why haven’t the service companies been invited to the party?
Norway Leading the Oilfield Service Comeback
The cost cuts made during the downturn and the recent increase in oil prices have led to some global offshore projects becoming economically viable. Norway is leading the comeback.
P&A Sowing Harmony Among Operators?
With no money to be made, P&A is one area where operators can put aside their hyper-competitiveness to work together. Members of the recently formed PACE network discussed the virtues of collaboration at the Decommissioning and Abandonment Summit 2018.
Government, Industry, Consumers, and Arithmetic: How Will the Rise of Electric Vehicles Impact Oil Demand?
Even if EVs reach cost and performance parity with conventional combustion engines, a lot of questions remain about how long it will take for consumers to get comfortable that parity is real, and for manufacturers to turn over enough volume to make a big enough impact on the oil industry.
Oilfield Services Q3 Review: Promising Outlook After Tough Times
A rise in oil prices close to 3-year highs should further stimulate a recovering oilfield services and equipment sector, despite lower than expected late-2017 activity in US shale.
Decommissioning – Challenge Accepted
With $102 billion of decommissioning-related expenditure forecast to 2040 in Western Europe, opportunities are ripe for the supply chain to compete with innovative and cost-effective solutions for the E&P operators.
US LNG Exports Expected To Increase as New Facilities Come On Line
The US Energy Information Administration reports that increased liquefaction and utilization from new facilities has led to a jump in LNG exports in 2017.
Effective Site-Based Project Portfolio Execution Requires Owner, Contractor Staffing Balance
Independent Project Analysis researchers took a closer look at site project system staffing approaches including full alliance, owner engineering, contractor engineering, and core staffing to determine the effect of staffing characteristics on capital project outcomes.
SNC-Lavalin Wins Award for Fast-Tracking of Cardon IV Facilities Project
SNC-Lavalin was recognized by the Rice Global Engineering & Construction Forum’s Award of Excellence for the fast-track installation of a 150 MMcf/D natural gas processing plant for production from the offshore Venezuela Perla field.
GATE Energy Joins Ranks of Contract Awardees for Noble’s Leviathan Project
GATE Energy is the most recent contract awardee for Noble Energy’s Leviathan project offshore Israel. It will provide the commissioning of the production platform for the megaproject.
Reliance Awards McDermott Contract for KG-D6 Subsea Development
McDermott announced a letter of award for a contract from Reliance Industries for the deepwater KG-D6 subsea field development in the Krishna Godavari Basin.
Partnership Targets Stranded Fields With Fast-Deployment FLNG Vessels
Add Energy has partnered with Transborders Energy and will work with TechnipFMC and MODEC to develop a 1.0-MTPA FLNG vessel for small-scale stranded fields.
Dealmakers: Water Transport, Disposal Companies Tap Into Permian Basin
The demand for water and disposal services in the Permian Basin has piqued the interest—and investments—of companies eager to acquire existing pipeline infrastructure and saltwater disposal facilities to capitalize on the growing need.
What Project Sanctions Tell Us About the State of the Upstream Sector
Many of the biggest players in the industry—particularly the majors—have adapted their portfolios for “lower for longer” and are once again sanctioning big projects. While we are not back to the heady days of 2010–2014, we have left behind the dark days of 2015–2016.
More Contracts Awarded for Mozambique’s Coral South FLNG Project
Air Products, BHGE, Norsafe, and Sofec won contracts for Eni’s Coral South FLNG project in Mozambique.
TechnipFMC Awarded EPCI Contract for Husky’s West White Rose Project
Husky Energy awarded the EPCI contract for its $1.6-billion expansion project, West White Rose, to TechnipFMC. It includes the supply and installation of subsea equipment.
BP's Vessel Khankendi Completes Sea Trials in the Caspian
Baku Shipyard completed the sea trials of BP's subsea construction vessel Khankendi, which is being constructed for the Shah Deniz Stage 2 project.
Acteon and Actuant Assets Change Hands
Acteon Group is buying Actuant’s Viking SeaTech business at a steeply discounted price of $12 million compared to the $225 million that Actuant paid in 2013 to acquire the company, and Actuant is buying Acteon’s Mirage for $16 million.
Cryogenic Hose Technology: Transfer Solutions Keep Pace with the March of LNG
Global trade for LNG is projected to rise by 50% by 2020. There is a clear acceleration in demand for small- and medium-scale LNG, necessitating splitting of LNG into smaller load parcels. Transfer methods applicable to deeper water, smaller LNG carriers, and harsh environments are critical.
Eni Finalizes Mozambique FLNG Investment, Contract Rollouts Begin
Eni finalized a USD 7-billion investment in the Coral South FLNG project, the first offshore development in Mozambique. Service and equipment providers are announcing their awarded contracts.
Decommissioning—Will Yards Become a Bottleneck?
Will the UK decommissioning yards have the capacity to handle the anticipated workload of 261 platforms? Some of the pressure may be relieved as a result of the continuing production from many fields forecast to be abandoned in the current price environment as Opex costs offshore UK have fallen.
Mapping the Western Canadian Crude Oil Market Complex
Canada will become the world’s fifth-largest producer of crude oil in 2017. The solvent-assisted-SAGD poses the largest advancement in production techniques in the oil sands, and if scaled up, could further reduce extraction costs.
Decommissioning Expenditure in Western Europe To Top USD 100 Billion From 2017 to 2040
Western Europe is the first area outside of the US Gulf of Mexico to see large-scale decommissioning. Well decommissioning is forecast to account for the majority of the expenditure.
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