Oil majors have boosted demand for floating drilling units as deepwater drilling takes off, according to research from Rystad Energy.
Oil majors have boosted demand for floating drilling units as deepwater drilling takes off, according to research from Rystad Energy.
The independent energy research and business intelligence company revealed that demand from the world’s top oil companies for these units has climbed steadily in the past two years and noted that it is set to rise further through 2020 and 2021 as majors step up exploration activity in deepwater basins.
Floater demand surged from around 50 contract years in 2010 to peak at about 80 contract years in 2014, according to Rystad, which highlighted that the oil price slump caused majors to scale back floater contract commitments to less than 35 contract years in 2017.
Since then, ExxonMobil, Shell, BP, Chevron, Total and Eni have steadily increased deepwater contracting activity, having added almost 10 contract years since 2017, Rystad revealed.
Meanwhile, Rystad’s head of upstream research, Espen Erlingsen, said that global public E&P company offshore free cash flow in 2019 was the third best year on record at nearly $90 billion.
This figure reached $107.6 billion in 2018 and $53.9 billion in 2017, $2.3 billion in 2016, -$14.6 billion in 2015, $27.4 billion in 2014, $33.5 billion in 2013, $59.1 billion in 2012, $92.3 billion in 2011 and $61.2 billion in 2010, according to Rystad data.
Total offshore capital expenditure grew by 5% last year versus 2018, with a 7% rise in deep-water spending and a 3% boost in investments on the continental shelf, Erlingsen noted. For 2020, offshore investments are on track to grow 8%, with deepwater up 12% and shelf spending up 2%, he added.
