View of FPSO oil rig, floating production, storage and offloading vessel used to explore the crude oil & gas under the seabed.
WoodMac projects 17mboe from deepwater by 2030
- Production to plateau in countries with low exploration investment
Sopuruchi Onwuka
An updated report by industry investment advisory firm, Wood Mackenzie, estimates that global deepwater petroleum production assets would pump up to 17 million barrels of oil equivalents per day by 2030.
Director of Upstream Research for Wood Mackenzie, Marcelo de Assis, stated that a new deepwater production outlook presents a 60 percent rise from current levels, indicating that significant enhanced oilfield development projects would rule in the industry in the next seven years.
The report highlights the sector’s expansion from current 6% of upstream oil and gas supply to 8% by the end of the decade.
However, sustainability of operations of production is expected to peak and level out in countries where exploration activities and associated reserves growth have stalled. And rising cost of operations and offshore logistics constraints would continue to present challenges as operators continue to go deeper offshore.
According to de Assis, “Deepwater is the fastest growing oil and gas resource theme.” said Marcelo
“Brazil, Guyana, and Mozambique are the main growth drivers. Developments are also getting deeper; production from water depths of over 1,500 m will surpass that from 400-1,500 m by 2024.”
Wood Mackenzie’s analysis shows that traditional growth regions, such as the US Gulf of Mexico and Angola, have lacked in major new commercial discoveries.
“The forecast for mature deepwater basins remains uncertain. We could see production performance to begin to peak and then plateau after 2030 without an exploration and investment renaissance,” de Assis added.
“However, the characteristics of deepwater make it an attractive hunting ground for those seeking advantaged resources. Deepwater economics and emissions intensity metrics are among the best in the industry. Companies focused on the most resilient projects and decarbonization will continue to consider the sector as core to their upstream business models,” he said.
The industry faces other challenges as it matures. Cost inflation has hit global hotspots first, but constraints in the global deepwater supply chain will increase lead times and unit costs across the board. The hard-fought efficiency gains made during previous downturns will start to reverse.
Maintaining the growth, economic and emissions headroom is a challenge being taken on by an increasing number of countries and operators. There are five times more operators and countries with active deepwater sectors than in the 2020s.
But relative to conventional oil and gas, deepwater remains niche. Reflecting on the changes of the last decades and the challenges of the years ahead, de Assis concluded, “the future of the deepwater sector remains in their hands of the majors and Brazil’s Petrobras for the foreseeable future.”
