MARKETS • OFFSHORE
GMS Enterprise in Abu Dhabi
increase spending by as much as 50% in 2017. Increases in E&P spending in some areas, and equally importantly project cost deflation of up to 30%, is however starting to assist project sanctioning. While $49bn of FID CAPEX sanctioned in 2016 compares to over $195bn in 2013, we have seen a more active start to 2017 with a number of major projects, including [Johan Sverdrup Phase II and Leviathan] sanctioned.
Improved activity level despite uncertainty
The following has been written for Seatrade by Clarksons Research, part of Clarksons group which includes international offshore broker Claksons Platou Offshore.
Many within the offshore industry began 2016 fearing the worst market for thirty years and, despite a rising oil price, this outlook came through in nearly every aspect of the offshore market. Offshore oil and gas however, continues to play a key role within the energy sector, expected to produce 29% of global oil (26m bpd) and 32% of gas (114bn cufd) this year while meeting [16%] of overall global energy needs.
We move into 2017 with significant challenges and uncertainty but, following a 30% reduction in its cost base, some improved activity levels as we begin to move through the cycle. Norway continues to play an important role in the offshore sector, producing 7% of global offshore oil.
Oil Price and E&P Spending Two of the key drivers for the offshore sector have seen positive developments over the past 12
months, albeit from the situation of huge over-supply in the global oil markets that developed from 2014. Regional production outages and the OPEC decision to cut production (and the relatively high degree of compliance) have supported oil price increases but the responsiveness of US onshore production, including strong upticks in the rig count and higher than expected inventories, suggests caution in the short term.
During Q1 2017, oil prices have remained relatively well-supported above $50/bbl, although this must be viewed with caution, as various weekly reports of high US stocks put downward pressure on prices at various points during March and April, as did reports that the OPEC agreement might not be continued beyond an initial six-month timeframe.
The same caution applies to E&P spending which, after two years of 25% global cuts in 2015 and 2016, is due to increase for the first time in three years in 2017, but often with a focus on non-conventional rather than offshore. It looks possible that US onshore focused E&P companies may
The OSV Market As with the rig market, where utilisation declined to a 30-year low of 63% at the start of 2017 (see graph), supply re- calibration across OSVs continues. The future of the laid-up fleet and the orderbook are key, but uncertain, issues. There are more than 900 vessels built post-1990 in lay-up (along with an equal number of older units, although many of these were in lay-up pre-downturn) and with a range of maintenance standards the prospects for re-entering the active fleet vary widely. There are also 377 OSVs on order, with as many as half of this number completed boats sitting at yards. Only 18 OSV deliveries were recorded in Q1 2017: there has been little sign of any improvement in resale activity to find new owners for yard- owned units. The Clarksons Research index of dayrates in the major OSV markets has now declined by 50% since the beginning of the downturn, with most markets at OPEX levels but with plenty of volatility in the North Sea.
Shipyard & Supplier Challenges Only 93 offshore newbuild orders were recorded by Clarksons in 2016 (91% below the 2007 peak, and the lowest figure since 1993). Ordering of renewables related vessels was a rare bright spot (8 orders plus further orders in 2017), as was de-commissioning.
Ordering of FPSO and FSRU units may pick up in 2017. However, across the offshore sector, only 17 newbuild orders for mobile units were recorded during Q1 2017. If ordering were to continue at
Interested in what’s going on in the Middle East marine and offshore industry? Why not join us at SOMWME 2017 and hear the latest updates from the region. Free of charge to attend.
25-27 September 2017 Abu Dhabi National Exhibition Centre, Abu Dhabi, UAE AE
rine and offshore industry? st updates from the region.
?
www.seatradeoff
.seatradeoffshoremarine.com dffh
fshoremarine.com
16
Visit:
seatrade-maritime.com
Seatrade Maritime Review • Quarterly Issue 2 • June 2017
PHOTO: GMS
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100
