Bullish days dawning: analysts at an offshore trends conference have told delegates
'Brighter days ahead offshore'
Offshore capital expenditure is forecast to increase from last year's $260 billion to $360 billion by 2013 with the long-term outlook for the industry remaining bullish, market consultants Douglas Westwood said today.
“Leading indicators have been improving since the beginning of the year; our view is that offshore expenditure will grow,” Steve Robertson, the director of Douglas Westwood, told the Trends in the Offshore Drilling Industry conference in London.
“From 2011 onwards, delayed projects will come back into the market.”
Robertson said deep-water drilling will see particularly strong demand growth.
“There will be increasing reliance on deep-water drilling for supply,” he said, adding that the company forecast around 12% of total global demand will be supplied by deep-water drilling by 2015.
Robertson said demand from China being a key driver for oil demand fundamentals remaining strong.
“If China follows Korea’s path - as it has largely to date - oil demand will more than double in the next decade,” he added.
Robertson questioned whether supply could meet this demand, with 66 out of 99 producing countries having reached their peak production by 2008.
“Peak oil is not a myth or a scare tactic, in our view it is very much a reality,” he said.
Robertson’s optimistic view was supported by brokerage RS Platou.
Rig commitments in 2010 are forecast to go up by 25% compared to 2009 and, depending on the oil price, will vary between a 5% and 25% increase in 2011, partner Sven Zeigler told the conference.
The rig market has been hit hard over the past year following the sharp drop in the oil price.
“In 2008 there were 800 years worth of rig commitments made. This has dropped to around 400 years in 2009 - a 50% drop,” he said.
“The market is starting to turn around but it will take some time. Demand is starting to move up and my view is that current forecasts are usually a little conservative.”