It’s been a long time since we’ve had much good to say about the oil and gas industry. And when it comes to offshore, it seems like a very long time indeed.

But as we approach the 48th anniversary of the Offshore Technology Conference, it’s interesting to note that pundits are starting to write about the offshore again. Yes, the shale plays in North America have been the darlings of pundit talk in the past few years, while offshore projects continued to be over budget, not competitive and “dead in the water.”

But there have been a few sparkles in the water of late, and we must not forget the true remaining elephants are most likely located offshore. The shale industry wasn’t the only locale that adjusted to a lower-for-longer regime. The offshore industry has had to cope with project overruns that caused companies like BP to scale back a $20 billion project estimate on its Mad Dog Phase 2 to just $9 billion once company executives took a close look at the project and basically said, “What??”

In some recent news releases, companies like S&P Global Platts, Wood Mackenzie and Rystad Energy have taken up the offshore mantle, and we’re all happier as a result. Wood Mackenzie, for instance, noted that deepwater project costs have dropped 20% since 2014 and added that current deepwater breakeven prices could be as low at $50/bbl.

“That has made the prospect of launching these offshore projects more palatable even with low oil prices and competition for resources from U.S. shale plays,” a FuelFix article about the Wood Mackenzie report stated. “The cost reductions come from lower rig prices and moves to redesign projects and pump higher quantities of oil from wells.”

Additionally, S&P Global Platts said new U.S. Gulf of Mexico fields will add to production and perhaps spur operators to begin exploring again offshore after a virtually total dearth of offshore exploration over the past couple of years. Although the report said it might be 2018 before any noticeable activity takes place, new fields are adding to production, and recent finds are causing a renewed interest in development.

And the Rystad report will put smiles on the faces of some of those who lost their jobs during the last downturn, anticipating that hiring in the offshore sector will resume later this year after the shale plays regroup.

Finally, Bernstein Energy did a deep dive into current offshore projects to help investors determine those that are most likely to see development dollars in the future. Its study noted that 152 projects are under appraisal, up from a year ago. “Simplistically, therefore, we can say the offshore is looking 29% more optimistic than a year ago.”

I’m not sure just how optimistic 29% is, but it’s certainly a step in the right direction.

Offshore