Last week Douglas-Westwood (DW) gave its annual presentation to the Society of Underwater Technology at Imperial College, London on the subject of ‘Global Offshore Prospects’. This has been a regular winter event for the SUT for more than a decade, and an opportunity for DW to share its outlook for the offshore energy sector including the latest findings from recent and soon-to-be-published studies.
Research Director Steve Robertson opened the event with an introduction that reflected on the last 12 months and the positioning of the OFS sector heading into 2017. It was noted that the OFS industry, in many sectors at least, is past the worst of the downturn and seeing some recovery as we start the New Year. The availability of DW’s insight, projections and data in a new online format called SECTORS was also presented (look out for further details tomorrow!)
Economist Matt Adams followed with a review of the macro-economic factors impacting the sector presently, examining the evolution of oil price over the last 12 months and the key factors behind this. The impact of the recent OPEC cut was highlighted, with a narrowing of oversupply in 2017 to a balanced market. The volumes of additional offshore oil coming to market in 2017 and 2018 presented some downside risk to oil price, with some 917 thousand barrels per day additional capacity in 2017 and 1.2 million bpd extra in 2018
Steve followed with a run-through of DW’s latest market forecasts in a number of key sectors including offshore drilling, oilfield services (OFS), oilfield equipment, floating production and offshore wind. The continued plight of offshore drillers was examined, including the low levels of utilisation and dayrates for the fleet. It was noted the that floating production sector, which until January 2017 had not seen any orders for 18 months, appeared to be on the up with one order placed in January already and more expected to follow over the year. DW’s tracking of over 130 FPS development prospects was highlighted with the expectation that 54 would be installed over the next five years.
Geologist Matt Cook presented some highlights from his recent work with DW’s Drilling and Production offering, including in-depth country analysis for India, UK, and West Africa, followed by analysis of anticipated subsea activity by operator type.
The session was wrapped-up with a summary proposing that 2017 would likely be a very difficult year for the offshore sector – for many firms the focus would be survival. However, for those in position to invest, it was suggested that this was an opportune moment to secure equipment, services and skilled labour at historically low prices and historically short lead times.
We will be adding copies of our presentations at industry events to our new Online Service ‘SECTORS’. For a demo and free trial please contact Gareth Hector at email@example.com or complete a trial request here.
Steve Robertson, Douglas-Westwood London
+44 1795 594734 or Steve.Robertson@douglaswestwood.com