$170
Billion to be Spent on Offshore Drilling in Next Five Years
Posted: 8 March 2003
A major new report launched today by energy analysts Douglas-Westwood
forecasts that over the next five years 14,626 offshore wells will
be drilled worldwide at a total cost of some $170 billion. Of these,
development wells will total 10,231, exploration wells 2,665 and
appraisal wells 1,730.
Deepwater drilling expenditure is forecast to see strong growth,
with a total of US$40bn to be spent on approximately 560 exploration,
330 appraisal and 1465 development wells drilled in deepwater over
the next five years. The deepwater share of drilling expenditure,
which stood at around 20 per cent in 2002, will increase to around 31 per cent by
2007. Commenting on the results Dr Michael Smith said, “The
main drivers for this change appear to be an increasing shortage
of shallow water prospects, combined with innovations in drilling
technology allowing deepwater drilling in more extreme conditions.”
“We estimate that total drilling and well completion expenditure
in 2002 was $33.5bn. Global spending levels are expected to be reasonably
steady over the next five years, however, we expect significant
changes in some regions. North America, where we expect 4,798 wells
will have the highest share of the total spend, increasing (compared
to the previous five-year period) by $2.4 bn, and growth of a similar
magnitude is also expected in Africa, Latin America and the Middle
East.”
“However, Asia and Western Europe are both expected to see
a significant decline in expenditure. Asia’s forecast five-year
spend is some $4.5 bn less than the previous period, and the outlook
is similar in Western Europe, where forecast expenditure is over
$5.2 bn less than the 1998-2002 level.”
“Water depths capabilities will continue to grow beyond the
current drilling record of 2965m and deepwater wells will partly
offset declining activity in shallow waters. The percentage of deepwater
wells drilled reached around 12 per cent by 2002 and is expected to increase
to around 19 per cent in 2007.”
“A decline in shallow water activity is being driven by a
global shortage of opportunities. Some growth is possible in the
Persian Gulf but this would depend on the controlling governments,
primarily Iran and Saudi Arabia, encouraging investment to a much
greater extent than they do now.”
“Consequently most new expenditure on drilling rigs is expected
to be directed at upgrades of both jackups and floating rigs to
allow faster and/or deeper water and deeper reservoir drilling.”
“We expect steady, rather than dramatic improvements, to
drilling equipment and services over the next five years facilitating
wells to be drilled in more extreme situations, in greater water
depths and reservoir depths, at higher temperatures and pressures
and in areas prone to greater hazards. However, no radical new processes
are expected to make a major impact on expenditure within the time-scale
of our forecast.”
The World Offshore Drilling Report 2003-2007 forms part of a series
of reports that is used by over 200 companies in 28 countries. These
include the leading oil & gas companies, contractors and investment
banks.
The World Offshore Drilling Report 2003-2007 is available from
Douglas-Westwood Limited, www.dw-1.com.
|
