Offshore Oil & Gas Industry Has Stable Project Pipeline
With the global crude oil market in a supply glut, it may seem counterintuitive that spending money on deepwater or other offshore production infrastructure would be an economically feasible move. Looking at projects being tracked by Industrial Info, the global trend shows a healthy amount under construction, balanced with a similar amount of work in the planning stage. A large portion of the industry is engaged in expanding or maintaining existing production assets, but a lot of new construction is on the books right now and moving forward. Several billion dollars are slated for facility dismantling or decommissioning, but given the age of many pioneering platforms, this is more a natural occurrence than a sign of downturn.
Visit Industrial Info at Booth #9800 at the upcoming Offshore Technology Conference (OTC), May 1-4, at NRG Park in Houston, Texas. The OTC is the largest oil and gas sector trade show in the world. Last year, more than 68,000 attendees from 120 countries gathered at the annual conference, with more than 2,600 companies exhibiting.
In total, Industrial Info is tracking more than 2,600 individual offshore production, terminal and pipeline projects representing $455 billion in spending. Of this, roughly $190 billion is under construction, balanced by $220 billion still in the planning phase. It is worth noting that there are many more projects in the planning phase, roughly 1,300, as opposed to the just-under 600 that are under construction, indicating that the industry can look forward to more, smaller projects as time goes by. This follows with the new technologies being developed to remove the necessity of topside production platforms in favor of seabed production infrastructure and tie-backs to extend the reach of existing platforms.
Maintaining existing assets as long as possible has been a prevalent theme within the offshore industry, as life extensions on aging platforms are performed to the extent feasible. This trend can be seen in the numbers for decommissioning projects tracked by Industrial Info. Of the more than $13 billion in decommissioning being spent, nearly $10 billion is still in the planning phase, while only $1.5 billion is under construction (or deconstruction, as the case may be).
While decommissioning is a hot topic, looking at the grassroot construction projects, which make up well over half of the total global offshore spending at more than $273 billion, it is clear that new facilities are still a substantial part of the industry. Like the overall numbers, grassroots projects have a healthy balance of planned projects and projects under construction, indicating some optimism for the necessity of new production capacity, despite the current glut.
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