Despite Imminent Project Delays, 2015-2019 Deepwater Spend to Total $210 Billion
Deepwater expenditure is expected to increase by 69%, compared to the preceding five-year period, totalling $210 billion (bn) from 2015 to 2019. As production from mature basins onshore and in shallow water declines, development of deepwater reserves has become increasingly vital, particularly to the worlds oil majors. However, the recent oil price decline has intensified pressure on operators budgets. Consequently, numerous operators have deferred sanctioning of capital intensive developments.
Africa, Latin America and North America will continue to dominate deepwater Capex, with $173bn set to be spent over the next five years with Africa forecast to experience the greatest growth. The development of East African natural gas basins has not been aided by the plunge in Asian gas prices; however, the development of these gas basins is inevitable. The expected recovery of oil prices will spark a revival in LNG-related activities in the region towards the end of the forecast period. Latin America will, however, remain the largest market and North America is expected to experience the least growth.
In addition to the low oil price environment, building oversupply and the lack of rig demand will impact Capex growth over the forecast period. In recent years, record deepwater rig demand has resulted in unprecedented levels of rig orders.
Douglas-Westwood (DW) has identified a trough in global expenditure in 2015 and 2016 primarily driven by delays to delivery of FPS units in Latin America.
DWs 13th edition of the World Deepwater Market Forecast covers all key commercial themes relevant to players across the value chain in the deepwater sector:
Supply chain detailing the financing of deepwater developments, contractors, equipment and installations. Includes analysis of contracting strategies (e.g. frame agreements), dayrates, key players and capabilities of each sector within the deepwater market (drilling, FPS and subsea hardware).
Key drivers discussion of factors encouraging deepwater activity including deepwater production to offset declining production from onshore and shallow water basins, E&P spend of international operators and Petrobras activity in Brazil.
Regional forecasts forecast Capex within each region, including examples of notable projects and operators within the region and countries with most activity.
Component forecasts drilling and completion (subsea and surface completed wells), subsea production hardware, SURF and trunklines.
Focus areas examination of deepwater provinces, including recent discoveries in East Africa.
Procurement factors affecting the decisions facing FPS operators, whether to lease or own vessels and details of major leasing contractors.
List of deepwater prospects includes information on all identified prospects coming onstream from 2015 to 2019 by operator, location, water depth, number of trees and status category.
Why purchase the Deepwater Market Forecast?
DWs market forecasting is trusted by sector players worldwide, with clients including the worlds top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms.
The report is essential for financial institutions, equipment manufacturers, offshore construction companies, drilling operators, oilfield service companies, shipbuilders and oil & gas companies wanting to better understand where and when to make investment decisions.
Our proven approach includes:
Unique and proprietary data updated year-round from published sources and insight gained from industry consultation.
Detailed methodology the report uses research from DWs Deepwater Database, an in-house information system exclusive to DW. Our global analyst team is involved in the gathering and analysis of deepwater market data through primary research and professional networks. A project-by-project review of development prospects drives a data-rich market model and forecast.
Comprehensive analysis comprehensive examination, analysis and 10-year coverage of deepwater expenditure.
Concise report layout consistent with DWs commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of industry background and supporting materials condensed to enable quick review with speed-read summaries of key points throughout.
1 Summary and Conclusions 7
2 Drivers and Indicators 10
E&P Trends Spending Activity 11
Viability of Oil & Gas Developments 12
Continued Development of Offshore Reserves 13
Oil Prices 14
Gas Prices 15
Importance of Brazil 16
Current Influences in the Deepwater Market 17
Deepwater Focus Areas 18
3 Field Development 19
Field Lifecycle 20
Drilling and Completion 21
Field Development Concept Selection 22
Subsea Production Hardware 23
SURF and Trunklines24
Floating Production Systems (FPS) 25
4 The Supply Chain 27
Deepwater Supply Chain Drilling and FPS 29
Deepwater Supply Chain Subsea Hardware 30
Deepwater Drilling Fleet 31
Rig Dayrate Analysis 32
Subsea Tree Market Trends 33
FPS Leasing 34
Supply Issues Local Content and Personnel 35
5 The Deepwater Market Forecast 36
Forecasting and Potential Upside 38
The World Deepwater Market By Region 41
The World Deepwater Market By Component 42
Eastern Europe & FSU 46
Latin America 47
Middle East 48
North America 49
Western Europe 50
Drilling and Completion: Subsea Completed Wells 51
Drilling and Completion: Surface Completed Wells 52
Subsea Production Hardware 53
Floating Production Systems by Region 56
Floating Production Systems by Type57
6 Appendix 58
Deepwater Prospects 59
Data and Text Conventions 65
Table 1: International E&P Expenditure ($million) 11
Table 2: E&P Expenditure (Consolidated) ($ millions) 11
Table 3: Selected Majors Oil Production 2002-2013 13
Table 4: Global Deepwater Capex by Region 41
Table 5: Global Deepwater Capex by Component 42
Table 6: Africa Deepwater Capex by Component 43
Table 7: Asia Deepwater Capex by Component 44
Table 8: Australasia Deepwater Capex by Component 45
Table 9: Eastern Europe & FSU Deepwater Capex by Component 46
Table 10: Latin America Deepwater Capex by Component 47
Table 11: Middle East Deepwater Capex by Component 48
Table 12: North America Deepwater Capex by Component 49
Table 13: Western Europe Deepwater Capex by Component 50
Table 14: Drilling and Completion: Subsea Wells Deepwater Capex by Region 51
Table 15: Drilling and Completion: Subsea Wells Units by Component Type 51
Table 16: Drilling and Completion: Surface Wells Deepwater Capex by Region 52
Table 17: Drilling and Completion: Surface Wells Units by Component Type 52
Table 18: Subsea Production Hardware Deepwater Capex by Region 53
Table 19: Subsea Production Hardware Units by Component Type 53
Table 20: SURF Deepwater Capex by Region54
Table 21: SURF km by Component Type 54
Table 22: Trunklines Deepwater Capex by Region 55
Table 23: Trunklines km by Region 55
Table 24: Floating Production Systems Deepwater Capex by Region 56
Table 25: Floating Production Systems Units by Region 56
Table 26: Floating Production Systems Deepwater Capex by Type 57
Table 27: Floating Production Systems Units by Type 57Figure 1: Global Deepwater Capex by Region 2010-2019 8
Figure 2: Global Deepwater Rig Demand & Utilisation (2000-2015) 9
Figure 3: Viability of Oil and Gas Development ($/bbl) 12
Figure 4: Oil & Gas Production vs E&P Spend 12
Figure 5: Global Oil Supply mix Shallow/Deep Split 2000-2020 13
Figure 6: Oil Price & Demand 14
Figure 7: Natural Gas Price 15
Figure 8: Brazillian Offshore Basins 16
Figure 9: Forecast Deepwater Capex 2014 & 2015 Edition 17
Figure 10: Deepwater Focus Areas 18
Figure 11: Completion Strategy and Deepwater Field Development Concept Selection 22
Figure 12: Typical Lending Cycles in the Offshore Sector 28
Figure 13: Drilling and FPS Supply Chain 29
Figure 14: Subsea Hardware Supply Chain30
Figure 15: Rig Managers of Existing Deepwater Rigs 31
Figure 16: Rig Managers of Deepwater Rigs Under Construction 31
Figure 17: Deepwater Rigs Currently On Order by Shipyard 31
Figure 18: Dayrates of Semi-submersibles, Drillship and Jackup Drilling Rigs 32
Figure 19: Average Dayrates of Deepwater Drilling Rigs 32
Figure 20: Visible Subsea Production Hardware Orders 33
Figure 21: Market Share of Subsea Production Hardware Suppliers 33
Figure 22: Leasing Contractors of Existing and Under Construction Deepwater Vessels 34
Figure 23: Trees Installed by Category 38
Figure 24: Global Deepwater Capex by Region 41
Figure 25: Global Deepwater Capex by Component 42
Figure 26: Africa Deepwater Capex by Component 43
Figure 27: Asia Deepwater Capex by Component 44
Figure 28: Australasia Deepwater Capex by Component 45
Figure 29: Eastern Europe & FSU Deepwater Capex by Component 46
Figure 30: Latin America Deepwater Capex by Component 47
Figure 31: Middle East Deepwater Capex by Component 48
Figure 32: North America Deepwater Capex by Component 49
Figure 33: Western Europe Deepwater Capex by Component 50
Figure 34: Drilling and Completion: Subsea Wells Deepwater Capex by Region 51
Figure 35: Subsea Drilling Historic vs Forecast Capex 51
Figure 36: Drilling and Completion: Surface Wells Deepwater Capex by Region 52
Figure 37: Surface Drilling Historic vs Forecast Capex 52
Figure 38: Subsea Production Hardware Deepwater Capex by Region 53
Figure 39: Subsea Production Hardware Historic vs Forecast Capex53
Figure 40: SURF Deepwater Capex by Region 54
Figure 41: SURF Historic vs Forecast Capex 54
Figure 42: Trunklines Deepwater Capex by Region 55
Figure 43: Trunklines Historic vs Forecast Capex 55
Figure 44: Floating Production Systems Deepwater Capex by Region 56
Figure 45: Floating Production Systems Historic vs Forecast Capex 56
Figure 46: Floating Production Systems Deepwater Capex by Type 57
Figure 47: Floating Production Systems Historic vs Forecast Capex 57