David Telfer, 11th August 2009
OIL and gas industry offshore spending is expected to grow strongly, despite the global recession.
An estimated £344billion has been invested in capital expenditure and £225.6billion in operating expenditure in the last five years.
It is anticipated this will rise to £480.3billion capital and £326.8billion operating spend in the period to 2013.
Exploration for fresh oil and gas supplies and development of existing and new discoveries from ever-more demanding reservoirs in new extremes of environment are expected to drive offshore industry spend.
These headline forecasts appear in the new updated edition of a report on offshore production and spending published by energy consultant Douglas-Westwood and Energyfiles.
The report shows that in 2008 offshore oil production was nearly 10billion barrels or 34% of total world production, while offshore gas production had risen to nearly 6billion barrels of oil equivalent, equalling 29% of all world gas production.
Higher oil prices – double what they averaged five years ago – stimulated investment.
Report author Michael Smith of Energyfiles noted, however, that 2008 saw the beginnings of financial turmoil as high prices and economic decline reduced energy demand.
He said global oil demand, standing at around 85million barrels per day in 2007, declined in 2008 and will decline even further in 2009 – the first time this has happened for two consecutive years since 1983.
The report projects that cutbacks in global upstream oil and gas budgets for 2009 will be short-lived, and offshore annual spending will once again be driven up strongly.