FAVERSHAM, UK – Deepwater expenditure is expected to increase by 69%, compared to the preceding five-year period, totaling $210 billion from 2015 to 2019.
Douglas-Westwood, in its commentary, has noted that as production from mature basins onshore and in shallow water declines, development of deepwater reserves has become increasingly vital, particularly to oil majors. However, the recent oil price decline has intensified pressure on budgets causing numerous operators to defer sanctioning of capital intensive developments.
Africa, Latin America, and North America will continue to dominate deepwater capex, with $173 billion set to be spent over the next five years with Africa forecast to experience the greatest growth.
In addition to low oil prices, 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 has identified a trough in global expenditure in 2015 and 2016 primarily driven by delays to delivery of FPS units in Latin America.