Rystad Energy has forecasted a ‘strong outlook for contractors’ with more than 100 new offshore projects expected to be sanctioned globally next year.
The energy consultancy said an expected £166billion will be spent on offshore oilfield services in its latest project report.
Offshore contractors can expect revenues to start growing again next year according to Rystad, following four years of decline.
In terms of value, 30% of 2019 projects are expected in the Middle East, 25% in South America, 15% in both Africa and Asia, and the remainder in Europe and North America combined.
Head of oilfield service research, Audun Martinsen, said: “The offshore service market is like a super tanker: It takes time to accelerate.
“The uptick in new projects in 2017, 2018 and now 2019 will be enough to turn revenue growth positive to mid-single digits as offshore capex is set to increase due to the recent years of capital commitments. And on top of that comes expected increase in operating expenses.
“Offshore operators are quite trigger-happy on FIDs these days, despite the recent reduction in oil prices. 2018 saw the lowest obtainable unit prices since 2006, as much as 30% down from the peak in 2014, and that makes their cost per barrel and breakeven prices highly favorable.
“Couple that with one of the most profitable years for E&Ps in decades in 2018, and the recent production cut agreement by OPEC and Russia – offshore operators want to focus on field development again.”