May 10, 2019

Rystad Energy highlighted the tremendous offshore potential at the Offshore Technology Conference (OTC) in Houston, Texas, celebrating its 50th birthday. The independent energy research and consultancy headquartered in Norway with offices across the globe – has analyzed the historical investments and oilfield service purchases of the world’s 50,000 oil and gas fields. While the forecast is uncertain, our analysis paints a fascinating picture of how offshore could contribute to the future of the service industry.
“Total greenfield project sanctioning, summed up to the present day, only accounts for 40% of estimated oil and gas volumes of offshore projects ever to have been sanctioned for development. Likewise, the brownfield market has only begun, with total historical expenditures accounting for only about 20% of estimated brownfield spending over the projects’ lifetime, leaving 80% of brownfield spending to the future. And the decommissioning market is still in its nascent form,” says Audun Martinsen, head of oilfield services research at Rystad Energy.
Rystad estimates that around 800 billion undiscovered barrels of oil equivalent exist globally, suggesting that exploration will still be in business in the next 50 years.
“However, we expect the offshore industry’s appetite for exploration to continue to weaken over the long term as more potential resources are discovered. Exploration will likely be forced into deeper and more remote waters, which could be too expensive to develop given the availability of other competitive sources of supply,” Martinsen said.
Greenfield projects are new developments of new oil and gas fields. Historically, sanctioned greenfield projects have racked up total investments of about $3700 billion in real dollars worldwide. In total, greenfield sanctioning has likely only achieved 40% of its potential with reference to total global reserves.
As for brownfield projects – that is, expenditure in existing fields already in production – this will be influenced by the improvements that have been achieved in recent years to reservoir depletion rates through the use of advanced technology. There are about 3,000 oil and gas fields producing today, and close to 50% of them could still be producing in 2030. In addition, upcoming projects already under development or expected to be sanctioned represent an additional 2500 oil and gas fields, each of which will require brownfield investments.
The most immature market in the upstream oil and gas industry is decommissioning. We estimate that only 3% of necessary decommissioning expenditure has already been spent, which entails the cost of removing, plugging and abandoning existing and to-be developed oil and gas fields.
The maintenance and operations service segment is naturally the market with the most volume of work ahead, with 58% of the market to be spent in the future representing $20,500 billion in expenditures.
“Well Services and Commodities, Drilling Contractors, EPCI, and Subsea are equally large markets which we expect will make significant contributions to the service sector in the next 50 years,” Martinsen commented.
(Source: Rystad Energy)