Annual greenfield capital expenditure is set to break the US$100 billion threshold this year, according to Norway’s Rystad Energy as offshore development activities surge globally. And investments in Guyana’s offshore Stabroek Block will take up US$7 billion of that pool.
The industry will be seeing its highest growth in a decade in the next two years – with US$214 billion of new projects lined up.
And this means one thing: offshore is back in the spotlight.
Rystad Energy expects offshore activity to account for 68% of all sanctioned conventional hydrocarbons this year and the next.
These investments will be a boon for the offshore services market, Rystad Energy noted, with supply chain spending hiking by 16% this year. Offshore rigs, vessels, subsea and floating production, storage and offloading (FPSO) activity are all set to flourish.
The Middle East leads the list with mega investments into mammoth projects in Saudi Arabia, Qatar and the UAE.
South America follows closely behind with Guyana and Brazil. Rystad Energy said Brazil’s upstream spending will approach US$23 billion. Then in North America, spending on offshore in the US will top US$17.5 billion and US$7.3 billion in Mexico.
“Offshore oil and gas production is not going anywhere, and the sector matters now possibly more than ever,” said Audun Martinsen, head of supply chain research at Rystad Energy. “As one of the lower carbon-intensive methods of extracting hydrocarbons, offshore operators and service companies should expect a windfall in the coming years as global superpowers try to reduce their carbon footprint while advancing the energy transition.”
This year, Stabroek Block operator ExxonMobil Guyana and its partners Hess and CNOOC will be focused on bringing its third development – Payara – online. The FPSO, named Prosperity, is already en route to Guyanese waters for start-up.