Medium Term Growth Forecast for Global Oil and Gas Production
This is a Guest Blog written by Matt Cook from energy business advisors Douglas Westwood
After several years of gains driven by buoyant oil and gas prices, production took a hit in 2009 as the 2008 recession saw the price boom bubble burst. Global hydrocarbon production now looks to a bright future and is set for 16% growth from 2013 to 2020.
Driving this will be large deep water gains, an emerging shallow water gas market and large-scale redevelopments onshore. North America, China, Saudi Arabia and Russia will continue to be big players but will soon be joined by Brazil, Angola and Nigeria as their deep water markets move from strength to strength.
Traditionally productive markets are in decline and face a variety of futures. Shallow water oil production is struggling for growth despite high levels of investment while many ageing onshore markets require redevelopment and must turn to unconventionals as the North American markets have in order to stand a chance of long term growth.
A key driver in offshore production growth will be the deep water and shallow gas markets. For deep water, the most promising are the South Atlantic plays – Brazil, Angola and Nigeria. Despite already overseeing high levels of production, Petrobras will struggle to fulfil the area’s full capacity due to large debts and delays to newbuild FPSOs. In addition to Brazil, pre-salt reservoirs are being explored off West Africa and are showing enormous potential. The shallow gas market is set to be buoyed by high export potential in South-East Asia and Latin America as well as redevelopments in the Gulf of Mexico and Arabian Gulf. Leading the way will be landmark FLNG projects in West Africa and South-East Asia.
Onshore production will continue to be dominated by the Middle Eastern, North American and Russian markets. Douglas Westwood expects USA’s gains in both production and drilling to come from the continued storming success of shale oil and shale gas as well as new efforts into conventional oil. Russia is set for greenfield projects that will see production plateau while many of the Gulf States are poised for massive EOR redevelopments of brownfield projects. China is also set for large-scale investment into its onshore fields as it looks to satisfy rapidly growing domestic demand.
Douglas Westwood expect this forecast global growth to be good news for drilling contractors and oilfield services. This is due to the increasing abundance of mature markets requiring more and more wells to be drilled to achieve smaller gains in production. Indeed the DW production forecast requires a 36% well completion increase from 2013-20.
For more information on this blog contact Douglas Westwood on 01795 594735