Spending on Offshore Drilling to Rise 32%
Source: Energy Current (4/16/09)
"From 2010, a return to increases in spending are forecast, especially directed at deepwater development projects."
According to the latest edition of the World Offshore Drilling Spend Forecast 2009-2013 published today by Douglas-Westwood and Energyfiles, US$278 billion was spent between 2004 and 2008 on offshore drilling. The report forecasts lower spending in 2009 and 2010, followed by a return to previous levels of growth, to total US$367 billion over the five year period. By 2013 the global drilling market will be worth an estimated US$89 billion, more than doubling since 2004.
The report's author predicts the number of offshore wells drilled will rise 7% over the period 2009-2013, despite a sharp decline in 2009.
"Approximately 18,310 offshore wells were drilled over the last five years. The forecast is of a decline in 2009, followed by consistently rising numbers including a sharp jump in 2011, to total 19,570 by 2013. Asia is still seeing the highest activity, followed by North America and then Western Europe," said Dr. Michael R. Smith of Energyfiles.
"Due to a lack of opportunity, shallow water exploratory drilling has been on a declining trend albeit with a modest price-led resurgence in 2006 and 2007. Shallow water exploratory drilling levels are not expected to ever return to their most recent 2007 peak, but growth in deepwater drilling has supported exploratory drilling over the last five years, to reach 40% of all exploratory wells by 2013.
"The steady growth is a result of new ultra deepwater targets becoming increasingly viable, as the capability of deepwater production systems is improved, giving additional encouragement to explorers to take these expensive risks.
Smith also points out that engineering makes up the biggest cost sector in offshore drilling, followed by rigs.
"From 2010 a return to increases in spending are forecast, especially directed at deepwater development projects. The big expansion in the number of rigs available for these projects will just about meet market demand. Even though total well drilling numbers are forecast to flatten off after 2012, this will not prevent overall spends continuing to rise as wells become ever more costly and oil prices surge again."