Page 36: of Offshore Engineer Magazine (Jul/Aug 2024)

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THE OUTLOOK FLOATING PRODUCTION

FPSO DUQUE

CAXIASSAIDA

Petrobras from asserting sovereignty over a large swath of Guyana Rystad Energy consultant Mike McCormick’s wide-ranging (intersecting with Stabroek), the issue remains unresolved. presentation addressed this question, saying: “We are in the early innings of an offshore up-cycle,” noting that global offshore capital expenditures in 2023 had reached $205

Economics of Exploration

Amidst these uncertainties, which followed on surges billion (with 13% tied to exploration). For 2028, Rystad in exploration and discoveries in 2022-2023, chartering forecast growth up to $242 billion of offshore capex. In activity for exploratory drilling in the region had been his remarks, McCormick opined that the advent of $500k muted. As exploration continues; March, 2024 saw the day rates would have minimal impact on decisions to move ahead; indeed, he said “Upcoming deepwater Final Invest- year’s frst discovery, at the Bluefn well (XOM’s sixth sanc- ment Decisions (FIDs) are highly proftable at current price tioned project in Staboek). First half 2024 saw XOM tak- ing two ultra-deepwater drillships, Stena Carron (Gen 6 and cost levels.” In explaining the economics at play, he

DP3, already stationed in Guyana) and Stena DrillMAX noted that oil majors would look for a 15% - 20% return (completing a brief stint off Newfoundland & Labrador threshold for moving ahead on projects. The Rystad analy- sis suggested that, with $500k/day hires on rigs, a propor- for ExxonMobil, following earlier work in Guyana, includ- ing the successful Bluefn discovery), for work starting in tion of around 15% of deepwater projects awaiting FID late 2024 at undisclosed day-rates. Activity is again picking would see internal rates of return below 20%. Reminding the Marine Money audience that the previous upcycle saw up. Analysts Evercore ISI noted in its May edition of “Off- day rates nearing $800K/day, he suggested that around shore Oracle” that: “Dayrates for Ultra DeepWater are looking robust, averag- ing in the high 400s YTD. Four rigs announced this year on drilling assets approached such levels again. so far exceeded $500 kpd, including the Deepwater Asgard (Transocean $505 kpd), the Deepwater Atlas (Transocean

Fleet Developments $505 kpd), the West Capella (Seadrill $545 kpd), and the The exploration sector’s onshore merger mania (which

Deepsea Aberdeen (Odfjell Drilling $504 kpd)” saw XOM complete its $60 billion purchase of Pioneer

How might these escalating day rates impact the eco- Resources in Spring, 2024) has been complemented with nomics of exploration; could projects be cancelled? At the an offshore component. In June, 2024, Noble Drilling an- 2024 Marine Money event held in late June in New York, nounced terms of its acquisition of Diamond Offshore, in 36 OFFSHORE ENGINEER OEDIGITAL.COM