ULTRA-DEEP GROWTH: $378 BLN
Apparently undeterred by low oil prices, oil & gas output from ultra-deepwater (>1,000m water depth) fields will continue the relentless growth seen in recent years. In the latest World Drilling & Production Forecast, Douglas-Westwood predict combined oil & gas production from such fields will grow 7.7% year-on-year over 2015-2021 from 6.5 mboe/d to 10.2 mboe/d. This will come from the drilling of 1,470 ultra-deepwater wells, an increase of 68% on the seven years prior. A key factor is that at these water depths, only the most highly productive plays are being targeted. Additionally, deepwater projects typically have funding secured several years ahead of first production – hence the projected medium term growth.
Leading the way with increased production will be the historically big deepwater producers – Angola, Brazil, Nigeria and the US. The latter will see the strongest growth of the four with ultra-deepwater oil output set to climb from 1.5 mboe/d in 2015 to 2.1 mboe/d in 2021. This will be the result of 11 floating production platforms being brought online, including the recent additions of Anadarko's Lucius spar, Llog's Delta House and Chevron's Jack/St. Malo (both floating production semisubmersibles). This, combined with Petrobras' continuing success in Brazil's pre-salt reservoirs and West Africa's ultra-deepwater plays apparent resilience to the oil price downturn, global ultra-deepwater production will rise from 6.5 mb/d in 2015 to 10.1 mboe/d in 2021.
It must be noted, however, that such projects will be vulnerable to cancellation and delay in the long term should the current low oil price situation be sustained. Operators may look to improve the economics of projects currently in the pipeline by boosting reserve bases through conducting additional appraisal activity – well demonstrated by Statoil's recent gas discoveries in the area around the site of the future Aasta Hansteen spar.
DW anticipate $378 billion will be spent on floating production platforms and subsea hardware over the next seven years. Forty-five percent of this will be spent on ultra-deepwater fields, reflecting their importance in the global oil & gas supply picture.
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IEA - For the third consecutive year, global energy investment declined, to USD 1.8 trillion (United States dollars) in 2017 – a fall of 2% in real terms. The power generation sector accounted for most of this decline, due to fewer additions of coal, hydro and nuclear power capacity, which more than offset increased investment in solar photovoltaics.
EIA - Crude oil production from the major US onshore regions is forecast to increase 143,000 b/d month-over-month in July from 7,327 to 7,470 thousand barrels/day , gas production to increase 1,066 million cubic feet/day from 69,466 to 70,532 million cubic feet/day .
U.S. FRB - Industrial production rose 0.6 percent in June after declining 0.5 percent in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. Manufacturing output moved up 0.8 percent in June.
U.S. DT - The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $69.9 billion. Of this, net foreign private inflows were $58.8 billion, and net foreign official inflows were $11.1 billion.