The global offshore is in the early innings of a multi-year upcycle, with deepwater natural gas production forecast to account for 25%-plus of total output by 2040.
Natural gas and oil development is being lifted by several deepwater discoveries, according to analysts. Evercore ISI analysts said a Brent oil price “above $50/bbl is economic for most international and deepwater basins.”
Projects that had been put on hold in 2020 also have resumed, “and operators are sanctioning projects with a new sense of urgency,” Evercore analysts said.
Ten deepwater projects sanctioned last year accounted for nearly $43 billion in capital expenditures (capex). Nineteen projects reaching a positive final investment decision in 2021 had total capex of $38 billion.