Page 39: of Marine Technology Magazine (July 2006)

www,seadiscovery.com Marine Technology Reporter 39

Daily offshore oil & gas production, currently standing at around 43 million barrels of oil equivalent (boe), is forecast to grow to 53 million boe in 2010 and drive industry annual expenditure from $193 billion in 2006 to $248 billion by 2010, according to the "The World

Offshore Oil and Gas Production & Spend Forecast," a study on the prospects for the offshore oil & gas industry published by Douglas-Westwood and based on informa- tion in the Energyfiles database.

Douglas-Westwood' managing director John Westwood said "High oil & gas prices over the period to 2010 will result in continued strong growth in the offshore oil & gas sector. Over the next five years we expect annual capital expenditure to increase by 10 percent from just under $110 billion in 2006 to $120 billion in 2010, but the real star of the show will be the less glamorous operational sec- tor with a forecast growth of 53 percent, from $83 billion to $127 billion."

Energyfiles director and report lead author Dr. Michael

R. Smith said "offshore spends are increasing rapidly but there are considerable differences across the regions. The main causes for the disparities are an increasing shortage of lower cost prospects in all but the Persian Gulf and the limited availability of deep water sedimentary areas with potential for oil and gas reserves outside those already identified in Brazil, the Gulf of Mexico, West Africa and some other less prominent regions. Nevertheless all mar- kets will retain ever-higher levels of operating expenditure.

Overall, we expect West Africa to show the greatest growth at nearly $13 billion."

The report stresses that new activity in the mature off- shore regions will increasingly become dominated by existing and new start-up small oil companies (along with the relevant National Oil Companies) as producing and exploration assets are acquired by smaller companies that specialise in marginal field developments and in scaveng- ing for tail-end production.

Resource Limitations

However, a particular concern is that over the next three years most sectors of the offshore industry will be equip- ment and people resource-constrained. "Day rates will remain high, especially for capital assets such as high spec- ification drilling rigs and other vessels. The experienced

Offshore O&G Spend forecast to rise to $247B by 2010 (Photo Cour tesy of Shell)

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