Westwood forecasts global offshore EPC investments at US$62.5 billion in 2023

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Offshore engineering, procurement, and construction (EPC) investments for 2023 are set to reach a staggering total of US$62.5 billion, with US$29 billion already awarded, and an additional US$33.3 billion anticipated for the remainder of the year, according to Westwood Energy’s Insights. 

The Middle East (48%), Southeast Asia (20%), and Latin America (8%) are the top spending regions, with operators like Saudi Aramco, North Oil Company, and PetroVietnam leading the way.

Moreover, Westwood said that the global offshore drilling rig contracting activity has significantly increased, adding 125 years of rig backlog in the last quarter alone. ADNOC secured the most rigs for jack-ups in the United Arab Emirates (UAE). This trend is marked by longer contract fixtures and tenders as operators aim to secure long-term capacity.

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Market demand for jackup rigs has driven their utilization above 90%, with day rates reaching up to US$165,000/day. Drillship utilization was 97% with day rates averaging nearly US$425,000/day for new fixtures. The marketed sixth-generation harsh environment semisubmersible rigs are also witnessing high utilization and day rates, recently recording a clean rate fixture of US$500,000/day for the first time since 2015.

Westwood predicts strong utilization for all three rig types as demand continues to grow. As a response to the surge in offshore activity, the number of active offshore support vessels (OSVs) has risen to 3,077 vessels, primarily platform supply vessels (PSVs).

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In the last year, PSVs, particularly in the 2-4,000 deadweight tonnage (dwt) group, saw substantial growth in the active fleet size. anchor handling tug supply (AHTS) vessels also experienced a modest net increase, with the most growth seen in the AHTS 12-16,000 brake horsepower (BHP) segment. The growth in the active fleet can be attributed to vessels migrating to the Middle East Gulf Cooperation Council (GCC) region due to increased drilling activity.

Westwood’s report suggests that further supply and increased day rates can be expected in the coming years to meet the growing offshore industry demands.

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