By OGJ editors
HOUSTON, Dec. 6 -- The offshore oil and gas industry is expected to spend $1.4 trillion worldwide during the next decade, and offshore production is forecast to grow to 55 million boe/d by 2015 from 39 million boe/d in 2004, Douglas-Westwood said.
Offshore oil is forecast to provide 39% of global oil production by 2015, compared with 34% in 2004. Offshore gas production is expected to provide 34% of global gas production in 2015, compared with 28% in 2004.
Douglas-Westwood reported the results in recent study of long-term offshore oil and gas prospects.
Study author Michael R. Smith said, "In recent years, offshore oil and gas production growth has been constant and rapid. Offshore output is expected to be some 27 million b/d of oil and 750 billion cu m (bcm) of gas in 2004. It is forecast to grow to 33 million b/d and nearly 1,300 bcm/year by 2015."
He added that expenditures are being diverted from mature to immature countries to permit this growth.
"I think the extent of the shift will have a massive effect on where and what type of equipment and services will be required," Smith said.
Deepwater growth
The role of deep water is forecast to continue growing. The study forecast that nearly 25% of offshore oil will come from deep water in 2015 compared with 10% in 2004. After 2010, all global offshore oil production growth will be from deep water, compensating for declining output from shallow water.
Referring to regional shifts, Smith said, "True offshore oil production began in North America in 1938, and since then, all regions have seen some expansion but most rapidly from Western Europe�mainly the North Sea. In 2004, Western Europe was providing 21% of all offshore oil but is forecast to be providing just 11% by 2015.
"The Middle East, due to its large reserves, and Africa and Latin America, due to their deep waters, are forecast to be contributing the largest shares by 2015, with 21%, 19%, and 18%, respectively."
Gas production growth
Offshore gas production is forecast to continue to rise from both shallow and deep water. In terms of oil equivalent by 2015, gas is expected to provide 40% of offshore volumes, the study said. In addition, 12% of offshore gas is expected to come from deep water in 2015, compared with 7% in 2004.
"The growth in importance of gas, and offshore gas in particular, will drive an unprecedented increase in expenditure on gas infrastructure, including pipelines, LNG plants, gas-to-liquid processing plants, tanker transport, and loading and unloading terminals," Smith said.
Real cost increases
The expenditures forecast in the report are in 2004 dollars and are based on the assumption that inflation will remain low. The study also assumes that upward cost pressures and a higher oil-price environment will be counterbalanced by downward cost pressures through improved technology and cost-cutting strategies.
John Westwood, report series editor, said, "Over the longer term, a sustained increase in oil prices is likely as a global energy supply gap develops and real cost increases materialize, which could lead to additional expenditure growth."
Governments owning high-potential production areas will expect higher takes, he said. In addition, an increased number of marginal developments brought on stream and efforts to increase recovery factors inevitably will lead to more lower-production wells than traditionally required offshore, he said.
