Norway Targets $2t Int’l Oil & Gas Spend
Analysis of 19 target countries and 26 key onshore and offshore market sectors, ranging from land drilling equipment to offshore operations, has revealed that overall expenditure levels are expected to total $2t over the 2009-2013 period. These are amongst the key findings of a new report commissioned by Norwegian oil & gas partners INTSOK from energy business analysts Douglas-Westwood.
Addressing over 300 delegates at INTSOK’s 8th annual International Business Days conference in Oslo, Douglas-Westwood Chairman, John Westwood, outlined his views on the current market turmoil, the prospects for recovery and the expected outcomes in terms of future industry expenditure.
“The current economic environment has hit activity levels hard, however, by 2011 it is forecast that overall expenditure will have recovered and beyond this the majority of the selected market sectors are expected to exhibit growth through 2013,” Westwood said.
“Within the offshore target markets, expenditure is expected to grow from $163 billion in 2009 to $222 billion in 2013 and onshore markets from $170 billion to $229 billion.
“Over the next five years, we forecast that the total expenditure within the onshore and offshore INTSOK target markets will total nearly two trillion dollars, compared to about $1.4 trillion over the previous period,” said Westwood.
Key drivers include the strong growth in energy demand from the developing countries, increasing tightness in global energy supplies and a resultant growth in oil prices. In particular, the report authors note the prospects for offshore & deepwater activity. Westwood commented, “The era of easy oil is over and therefore the industry is continuing efforts to move oil and gas production offshore. Opportunities within the shallow-water markets are becoming increasingly scarce and operators are moving to prospects in greater water depths.”
Turning to the home market, Westwood noted that, “2009 marks the 40th anniversary of the discovery of Norway’s first field, Ekofisk. The country will produce oil & gas for many decades, however, it faces a future of declining oil production. Norway still has huge gas potential, particularly in the arctic and it is essential for future security of European gas supplies that it uses its proven ability to develop reserves in such environmentally sensitive areas.”