OIL & GAS MARKETS • DEPARTMENTS
>2200 2000-2200
1800-2000 1600-1800
1400-1600 1200-1400
1000-1200 800-1000
600-800 400-600
20 18
16 Million BOED
14 12
10 US
growth phase
8 6
Angola growth
phase NSTA report: Focus on sidetrack drilling,
interventions can boost UK production
Namibia’s Graff and
Venus expected
online in 2027-2028
Guyana’s Stabroek
reaches 1 million bbl/day
Búzios surpasses
500,000 bbl/day in 2020
on its way to >1.8 million bbl/day
Macondo Brazil begins
long-run expansion
4 2032
2030 2028
2026 2024
2022 2020
2018 2016
2014 2012
2010 2008
2006 2004
2002 2000
1998 1996
1994 1992
0 1990
2 Source: Wood Mackenzie Lens Upstream
Production growth in the deepwater sector to 2032 will be primar-
ily driven by Brazil, Guyana and Mozambique as there have been
few commercial discoveries in the more mature basins.

Deepwater production forecast to climb
60% by 2030 despite cost challenges
Global deepwater production will increase 60%, reaching 17 mil-
lion BOED, by 2030, according to a report from Wood Mackenzie.

This means the deepwater sector will expand from 6% of the
upstream oil and gas supply today to 8% by the end of the decade.

“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 to 1,500 m by
2024,” said Marcelo de Assis, Director of Upstream Research for
Wood Mackenzie.

On the other hand, traditional growth regions, such as the US
Gulf of Mexico and Angola, have lacked major new commercial
discoveries. “The forecast for mature deepwater basins remains
uncertain. We could see production performance begin to peak
and then plateau after 2030 without an exploration and invest-
ment renaissance,” Mr de Assis said.

Cost inflation will continue to be a challenge, with constraints
in the global deepwater supply chain leading to increases in lead
times and unit costs. The hard-fought efficiency gains made dur-
ing previous downturns will start to reverse.

The report also points out that deepwater will still remain
niche relative to conventional oil and gas. “The future of the deep-
water sector remains in their hands of the majors and Brazil’s
Petrobras for the foreseeable future,” Mr de Assis said.

Drilling activity in the North Sea remained low in 2021 as the
industry continued its recovery from the COVID-19 pandemic,
but a focus on sidetrack drilling and maintaining existing
wells could help boost production, according to the UK’s North
Sea Transition Authority (NSTA). The agency is also working
to spur more exploration drilling with the launch of the first
oil and gas licensing round since 2019 (read more on Page 44).

A new NSTA report noted that the UK offshore industry is
focusing on faster development, with approximately half of the
66 wells that were spud in 2021 targeting near-infrastructure
opportunities. Additionally, 30% of the wells were geological
sidetracks, which can be drilled more quickly and at lower
cost than new wells.

In the report, the NSTA also urged the industry to undertake
more well interventions to reactivate production, noting that
intervention work was carried out on just 15% of wells in 2021,
down from 17% in 2020. This has led to a decline in the perfor-
mance of the existing wellstock, with 34% of total active wells
on the UK Continental Shelf now shut-in or plugged.

Continued low demand may lead to
more semis departing North Sea in 2023
Utilization of North Sea semisubmersibles, as well as award
activity during 2022, have shown improvement, but a lacklus-
ter demand outlook for 2023, especially in the more mature UK
sector, could result in more units leaving the region.

According to Westwood Global Energy Group’s RigLogix, the
North Sea semi supply shrank by 17 units, or 36%, between
January 2015 and November 2022, following a prolonged lack
of demand for these units. The Island Innovator and Deepsea
Bollsta both left last year for new campaigns in Africa, for
example. While this shrinking supply will help to buoy utiliza-
tion in the near term, it could pose availability issues further
down the line if demand picks up, which Westwood predicts
may be the case from early 2024. During 2024, Westwood
expects to see several new Norwegian developments move
ahead because of the tax incentives that were implemented
by the government during 2020. Meanwhile, longer-term UK
campaigns are likely to start up, consisting of both plugging
and abandonment work and development projects.

Number of oil and gas contracts down, but contract value rises to $47.7 billion in Q3 2022
The overall number of contracts in the
oil and gas industry declined by 7% in Q3
2022, decreasing from 1,662 in Q2 2022
to 1,542 in Q3 2022, according to a recent
report from GlobalData. However, there
was an increase in the contract value
reported, which rose from $38.8 billion in
Q2 to $47.7 billion in Q3.

Keppel Shipyard helped to keep the
momentum during Q3 with its two engi-
neering, procurement and construction
contracts, said Pritam Kad, Analyst at
GlobalData. Combined, those contracts for
the P-80, P-82 and P-83 FPSOs are worth
$8.76 billion. All three units are destined
for Petrobras’ Búzios field (see Page 32).

Operation and maintenance represented
53% of the total contracts in Q3, followed
by procurement scope with 24%. Contracts
with multiple scopes, such as construc-
tion, design and engineering, installation
and procurement, accounted for 12%.

ADNOC Drilling’s two 15-year contracts
for eight jackups, worth a combined $3.4
billion, was also notable during Q3, as
were ADNOC’s agreements for directional
drilling and LWD with SLB, Halliburton,
Weatherford, Al Ghaith Oilfield Supplies
and Services, and Al Mansoori Directional
Drilling. D R I LLI N G CO N T R ACTO R • JAN UARY/FEB RUARY 2023
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