The global offshore oil and gas industry is set for its highest growth in a decade, with $214 billion in new project investments lined up over the next two years.
According to a study conducted by independent research and business intelligence company, Rystad Energy, annual greenfield capital expenditure exceeded $100 billion in 2022 and is expected to breach this threshold for a second year in a row in 2023.
Offshore oil and gas exploration and production (E&P) is projected to result in 68% of conventional hydrocarbon E&P activity in 2023 and 2024 – which is an 18% increase from comparisons against the period of 2015 to 2018 – while the number of offshore developments is expected to make up half of all sanctioned projects over the next two years.
“Offshore oil and gas production isn’t going anywhere, and the sector matters now possibly more than ever,” stated Audun Martinsen, Head of Supply Chain Research at Rystad Energy, adding, “As one of the lower carbon-intensive methods of extracting hydrocarbons, offshore operators and service companies should expect a windfall in the coming years as global superpowers try to reduce their carbon footprint while advancing the energy transition.”
With supply chain spending expected to grow by 16% in 2023 and 2024, with a year-on-year increase of $21 billion, new offshore developments and investments are expected to benefit the offshore services and equipment market, with companies such as offshore drilling contractor, Valaris, and oilfield services companies Schlumberger and Baker Hughes experiencing growth in recent years.
According to Rystad Energy, the projected growth is expected to have come as a result of companies seeking to develop projects that require less investment and offer more reliable production in the long-term.