Rystad Energy’s research shows that annual greenfield capital expenditure (capex) broke the $100 billion threshold in 2022. It will break it again in 2023. This is the first breach for two straight years between 2012 and 2013. The company claims that the offshore oil and gas sector is set for “the highest growth in a decade in the next two years,”. It will have a $214 billion growth of new project investments lined up.
The energy market intelligence provider outlines an expectation of offshore activity to account for 68 percent. It is for all sanctioned conventional hydrocarbons in 2023 and 2024. It will be up from 40 percent between 2015-2018. This is as global fossil fuel demand remains strong and countries look for carbon-friendly production sources.
Rystad highlights that offshore developments will make up almost half of all sanctioned projects in the next two years. It will be up from just 29 percent from 2015-2018 in terms of total project count.
Furthermore, the new investments will be a boon for the offshore services market. With supply chain spending to grow 16 percent in 2023 and 2024, a decade-high year-on-year increase of $21 billion. In line with this, offshore rigs, vessels, subsea and floating production storage, and offloading (FPSO) activity are all set to flourish.
Leading Global Drivers on Offshore Oil and Gas
Rystad underlines that one of the leading global drivers is the sizable expansion of offshore activities in the Middle East. This is as offshore upstream spending in the region will surpass all others for the first time. It was lifted by mammoth projects in Saudi Arabia, Qatar, and the UAE.
The region’s offshore spending growth looks set to continue at least for the next three years, growing from $33 billion this year to $41 billion in 2025. Rystad underscores that these countries are tapping into their vast offshore resources to meet rising global oil demand, backed by the necessary capital and infrastructure to outpace other producers.
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Source: Offshore Energy
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