Emerging Markets Have Drillers in Deep Water
Speaking at the IADC World Drilling Conference in Copenhagen, Douglas-Westwood’s CEO, Andrew Reid, outlined the impact emerging markets will have on global drilling activity in the coming years.
The Arctic is the next frontier in offshore discovery. Reid commented: “More than 400 fields have been discovered to date in the Arctic, providing reserves in excess of 240 billion boe. There is no doubt that further drilling activity in this region could have a major impact on offshore production in the foreseeable future”. Estimates suggest that a further 412 billion boe in undiscovered resources may be lurking beneath the surface, 84% of which are in offshore fields.
With space for big finds becoming increasingly limited in shallow waters and onshore, operators are looking deeper for major new discoveries. As production from deepwater fields continues to grow in importance, Brazil and West Africa look set to lead the way in expenditure with a combined forecast total of $126 billion in 2015. From 0% in 1990, deepwater oil production had grown to 9% in 2010 and is expected to expand to 13% by 2020. Indeed offshore production in general is gaining in importance. Accounting for 31% of total oil production in 2000 it is now estimated to have grown to 33%. With this trend set to continue until at least 2020, the future for offshore business and deepwater business in particular, looks good.
Emerging markets look set to drive growth in the onshore drilling market too. As regional markets recover from the global economic recession, demand for active drilling rigs continues to increase. Citing Iraq, Reid stated: “We expect to see substantial growth in rig requirements over the next five years. Douglas-Westwood forecast the total number of wells drilled in Iraq to increase by 24% between 2011 and 2015 with growth in day rates a likely side-effect”. Increases in active rig demand in Latin America, in addition to major Asian markets China and India will support strong growth in the onshore market between now and 2015.
As emerging markets look set to shape the global drilling landscape, industry actors can expect to find themselves drilling new ground onshore and increasingly in deep water.
