A new study published today by analysts Douglas-Westwood The World Deepwater Market Report 2008-2012 forecasts that nearly $25 billion will be spent annually in deepwater capital expenditure by 2012.
Speaking at the Deep Offshore Technology International Conference 2007, Stavanger, today, John Westwood, Douglas-Westwood MD commented that “the deepwater oil & gas industry is set for continued growth through to 2012, with over 30% growth forecast for the 2008-2012 period when compared with the previous five years
”Deepwater oil production currently accounts for almost 15% of total offshore production
, but over the next few years its share relative to shallow water output will grow – accounting for around 20% of offshore production by 2011.
“Africa is expected to be the leading deepwater development area over the 2008-2012 period, accounting for nearly 40% of the global deepwater spend. Since the first deepwater ‘elephants’ Africa has emerged as perhaps the most significant deepwater region in the world, with some stunning successes, such as Girassol, Xikomba and Kizomba.
“The Latin America region is dominated by Brazil in terms of deepwater activity. National operator Petrobras has established itself as a pioneer in the use of innovative technology to achieve production from tremendous water depths. Overall, the region is expected to account for nearly 20% of world deepwater development spend over the 2008-2012 period.
“The North America region is expected to account for over 25% of deepwater development Capex over the 2008-2012 period. With a few notable exceptions, deepwater fields in the US Gulf of Mexico tend to be smaller than those in other deepwater ‘hotspots’ such as Brazil or West Africa. The region’s extensive offshore infrastructure and the relative proximity of supply and service centres have a significant influence on E&P activity, turning otherwise marginal prospects into viable commercial propositions. These factors also mean that project lead times tend to be shorter than in other regions.
“The ‘Golden Triangle’ of deepwater, namely the Africa, Gulf of Mexico and Brazilian areas, will still account for 84% of global deepwater expenditure over the forecast period but the rapid emergence of Asia as a significant deepwater region should not be overlooked. Indonesia, Malaysia and India all have development prospects on screen for the 2008-2012 period and the region should account for 10% of deepwater Capex during this time.