Page 26: of Marine Technology Magazine (April 2012)

26MTRApril 2012Since Douglas-Westwoods first coverage of the deepwa- ter sector in the 1990s, it has developed into a vast multi- billion dollar business. The spectacular growth of this industry has been supported by some astonishing techno- logical advances. However, the industry has seldom been free from political interference, environmental debate and commercial challenges. The intention of this article is to examine the present state of play, drivers of activity and future outlook for the deepwater sector, drawing upon Douglas-Westwoods research. Industry Drivers Deepwater exploration and production (E&P) activity is driven by a variety of supply-side and demand-side fac- tors: ?The potential for world-class (multi-billion barrel) discoveries ?The lack of new opportunities onshore or in shallow waters and the need to offset decline from existing reservoirs ?New technological advances that improve technical and economic feasibility of deepwater developments In recent years, the world has witnessed oil price shocks driven by situations where supplies have become very tight as spare capacity is absorbed by growing demand for energy across the world. Future projections of oil supply and demand suggest that this situation is likely to berepeated again within the next few years. Fossil fuels are becoming more expensive as the resources we extract become more technically demanding and indeed energy intensive to access. Ultimately, a future peak in world oil supply is inevitable; the only questionremaining is the date that this will happen. The implica- tion of this supply scenario for the global energy markets is that we will expect to see a sustained increase in oil prices as supplies tighten in the run-up to the peak year. This will impact on deepwater developments to the extent that they will become even more economically viable as the oil price rises. Developments that were marginal at $60/bbl will undoubtedly be more vigorously pursued in an environment where the long-term expectations of oil price are $80/bbl and upwards. For oil companies the overall outlook for 2012 is posi- tive, with Barclays Capital estimating that worldwide E&P budgets will increase by 11%. The longer-term out-look indicates that subsea, predominately deepwater, developments will continue to play a major part in the portfolios of the majors independent oil companies (such as Total, Shell, BP and Exxon) and some national oil com- panies (such as Petrobras and Statoil). Regional updatesAfrica Africa is one of the key regions of the deepwater Golden Triangle and is currently the largest region of deepwater capital expenditure. However, it is likely to be eclipsed by Latin America over the forecast period. Most of the major deepwater developments in Africa are located off Angola, Ghana and Nigeria. Notable exceptions include West Nile Project (Egypt) and Windjammer (Mozambique). ? Angola ? The country has had a reputation in recent years as a deepwater tiger?, with its output at 1.7 million bpd in 2011. Major projects that have recently come onstream in Angola include Pazflor and Platina, whilst those planned or underway include developments of the Canela and Kaomba fields. ? Ghana ? The Jubilee field is one of the biggest discov- market report Offshore DeepwaterJennifer Harbour is an author of The World Deepwater Report .Jenny joined Douglas-Westwood in 2011, having previously worked within the field of industrial energy genera- tion, distribution and efficiency measures. She is a graduate from the University of East Anglias School of Environmental Sciences where she focused her studies on energy manage- ment, low carbon energy technologies and scenarios of peak oil. Since joining Douglas-Westwood, Jenny has been respon- sible for the collation and verification of data from a wide range of sources, her input having being pivotal in the deriva- tion of metrics used to determine future expectations of oil- field service demand.DW forecast a global Capex of over $232 billion for the 2012-2016 period ? 90% more than the amount spent in the preceding five year period.