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www.seadiscovery.com Marine Technology Reporter 41 "What's more considerable growth is forecast for all forms of deep water production facilities, but especially floating production systems and sub- sea production and processing hard- ware. Subsea systems are also expect- ed to attract an increasingly larger part of the shallow water offshore spend as marginal development pro- grams escalate."

Future Oil Prices "The oil price rises of the last three years have had a big effect on prices" said Dr. Smith. "The Energyfiles fore- cast for oil prices over the next five years is of erratic but generally flat levels in 2006 as oil demand growth is forced down by higher oil prices; as new non-OPEC production enters the market from the deep waters of

West Africa, from the Gulf of Mexico and from the Caspian Sea; and as new

LNG developments continue to replace oil use in Asia. Renewed oil price escalation is forecast after 2007 eventually leading to more cost infla- tion in the service sector. By 2010 the world will have entered a new, per- manent energy capacity-constrained environment waiting on real large- scale alternatives to oil in the trans- port sector."

The report concludes that "offshore production forecasts show that the lengthy era of relatively low-cost oil and gas sources has ended. Higher oil and gas prices are here to stay - an oil price collapse could only be driven by a world-scale economic and/or politi- cal crisis that interrupts demand growth."

As we move beyond 2010 the future of companies operating in the off- shore exploration and production industry will become increasingly vulnerable to outside economic and political circumstances. The period from 2010 to 2015 is still expected to be "the time period when global oil production from all offshore and onshore sources, including uncon- ventional sources, will become seri- ously resource-limited and year-on- year declines in global oil output will begin. During the transition period, whilst new transport fuels will have to be developed, the world will need all the offshore oil it can get." (Source: The World Offshore Oil and

Gas Production & Spend Forecast,

Douglas-Westwood)

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