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The soaring growth in remote deepwater production activities is leading to something of a mixed future for the global, fixed, offshore-platform market.
The reality is that many of the regions around the world that hold the potential for the greatest future offshore production may not be suitable for fixed-platform developments. Many of the pre-salt discoveries in areas such as Brazil and Angola, for example, lie in deep and ultra-deepwater while the significant natural gas deposits being found offshore East Africa are in a similar position.
In these frontier areas, a lack of existing infrastructure and greater water depths often make floating developments a more suitable solution for operators.
“As mature shallow water assets face production decline, remote deepwater production is likely to increasingly dominate operator E&P programs moving forwards, not only for IOCs (international oil companies) but also for NOCs (national oil companies), including Petronas, Pertamina, PEMEX and CNOOC,” said oil industry analysts Infield Systems.
However, despite all the above, the fixed platform market is by no means on the decline, it goes on to say.
Infield’s latest edition of its Global Perspectives Fixed Platform Market Report to 2016 forecasts both capital expenditure on fixed platforms and the number of installations. Infield revealed exclusively to E&P that total capex for the 2012-16 period is forecast to be $81.2 billion, still a massive investment figure.
The analyst anticipates that growth prospects for the fixed platform market in the North Sea, U.S. GOM and Asian regions will become more limited towards the end of the forecast period.
“Nevertheless, over the past year, economic recovery from the global financial crisis, along with strong economic growth from non-OECD countries has ensured that WTI oil prices have averaged just over $95 per barrel during 2011. High oil prices and price volatility have incentivized operators of all types to maximize local shallow-water production where the geopolitical environment is often much more stable,” it stated in a press release.
Asian operators form the cornerstone of the global fixed-platform market, it went on. “As Asian hydrocarbon demand has soared, indigenous NOCs have expanded shallow-water production, driving a growth in global, fixed, platform capital expenditure (capex) of 55% between 2007 and 2011. Another market dynamic that could support Asian fixed-platform activity is the Fukushima nuclear incident, caused by the Japanese tsunami in early 2011,” it added.
Infield also forecast that Africa’s share of global, fixed-platform capex spending will almost double from slightly under 7% over the 2007-11 period to more than 13% in the 2012-16 period.
Chevron and Total are expected to drive this growth in activity through their Angolan and Nigerian operations, including Chevron’s Mafumeira developments in Angola and Total’s Ofon (Phase 2) in Nigeria.
Fixed-platform market prospects are also expected to remain strong in the Middle East, which has seen strong hydrocarbon demand on the back of economic development and population growth.
Furthermore, after the Arab Spring, many of the regimes in the Middle East have offered concessions in the form of handouts and energy subsidies. The Abu Dhabi National Oil Co., Saudi Aramco and the National Iranian Oil Co. are expected to be the biggest players in the region and are forecast to collectively increase fixed-platform capex spending by more than 13% between 2012 and 2016, said Infield.
In the U.S. Gulf, the Macondo incident, along with booming onshore unconventional gas production, has led to a decline in shallow-water production in recent years. However, Infield forecasts fixed-platform demand to increase during the course of this year, driven by major projects, including Shell’s West Delta junction platform and Arena’s Rikes project.
Europe is also expected to see a buoyant, fixed-platform market over the next two years due to activity in Norway and the U.K. BP’s Clair Ridge development west of Shetland is one of the most significant projects taking place and will benefit from recent changes to the U.K. government’s fiscal regime.
More information on this report is available from Infield. www.infield.com.
Contact the author, Mark Thomas, at firstname.lastname@example.org.