Last year is the lowest spending on new field developments in 30 years. The offshore oil and gas sector is set to increase capital expenditures significantly.
Upstream oil & gas spending will to surge to around US$44 billion this year. This is in comparison to just US$12.3 billion. It is worth of engineering, procurement, and construction (EPC) contracts awarded in 2020. In 2019, before the pandemic hit oil demand and prices, the EPC contracts in the industry were around US$40 billion.
“In 2021, we will see a significant uptick in activity”. This is what Thom Payne, Head of Offshore at Westwood Global Energy Group said at Riviera Maritime Media’s Annual Offshore Support Journal virtual conference and exhibition on Wednesday.
Most of this year’s capital expenditure and the biggest EPC contracts will go to major natural gas projects offshore Australia and deepwater oil project developments offshore South America.
The significant increase in 2021 will also help the offshore rig and support vessel markets this year, Payne said at the conference. It is part of which will come from the deferred spending in 2020.
Payne is mentioning in an analysis that offshore investment is set for a rapid rebound this year. It is through a deferral of projects from 2020 and a “resurgent Petrobras.”
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Source: Oil Price
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