Sunday, January 13, 2008

BOOM TIMES FOR OFFSHORE OILFIELD SERVICE SECTOR


Date : 11.01.08
The offshore oilfield service sector is facing unprecedented levels of business with some firms already booking work for 2011, an energy expert said yesterday.

John Westwood, of energy business analyst Douglas-Westwood, said suppliers were virtually beating away customers just now and demand was still growing.

In his annual address to about 150 oil and gas executives at the Society of Underwater Technology in Houston, Mr Westwood delivered a series of upbeat forecasts for the offshore sector.

Highlighting the growing importance of deepwater exploration and production, he said: "Virtually the only place where giant fields will be found in future years is in deep water."

Douglas-Westwood expects world production in this area to grow from 6million barrels of oil equivalent per day in 2007 to 11million in 2011.

An estimated £13billion-plus will be spent annually on deepwater projects by 2012, representing 30% growth for 2008-12, compared with the previous five years.

Mr Westwood said: "This will drive demand for deepwater rigs, floating production systems, subsea production hardware and more.

"This drive to produce, what is very high-cost oil, from deepwater is the oil companies' response to declining production in offshore continental shelf areas such as the North Sea and Gulf of Mexico, and the increasingly onerous terms being sought by the biggest holders of onshore oil reserves: the national oil companies."

Oil firms were also facing higher costs in traditional areas of operation, he said, pointing out that lifting costs in the North Sea increased by 67% - to about £12.75 a barrel - between 2005 and 2007.

Mr Westwood added: "There are literally hundreds of small undeveloped offshore fields worldwide, but big oil needs big fields. The remaining easy oil and indeed gas is in hard places and is being strongly competed for by countries such as China, India and Russia."

Douglas-Westwood has also forecast strong growth in offshore renewables, with more than £8billion being spent worldwide on wind turbines from 2008-12.