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Douglas-Westwood (DW) has reviewed over 250 upstream capital projects sanctioned in the last four years to examine how development costs have changed before and after the oil price downturn. Preceding the oil price downturn, were growing concerns over the viability of some deepwater and arctic projects as a result of the unsustainable rise in development costs. This has been greatly exacerbated by sustained low oil prices, with lasting impact in all upstream sectors including the Canadian oil sands, US shale, shallow water and conventional onshore developments.

With a record number of developments at a pre-FID stage, DW’s research examines the average spend per barrel-recovered for newly-sanctioned projects. Re-engineering, cost deflation and standardisation are all serving to reduce the oil price threshold at which projects become economically viable.   Using our cost/component data, DW has also considered a hypothetical offshore project to show the principle segmentation of spend and how this varies over time. In this new price environment, our analysis of global upstream projects shows development Capex per barrel for deepwater projects decreased substantially by 41% over the 2012 to 2016 period, whilst US Shale D&C cost per barrel also declined 36% over the same period.


Why purchase the DW250 – Capital Cost Briefing?

The DW250 – Capital Cost Briefing examines trends in development costs in the upstream industry, with segmented analysis on deepwater, shallow water, oil sands, conventional onshore and the US unconventional industry, supported by analysis, insight and industry consultation.

The report is essential for financial institutions, equipment manufacturers, offshore construction companies, drilling operators, oilfield services companies, shipbuilders and oil & gas companies wanting to better understand historic market trends and where to make informed investment decisions.

Our proven approach includes:

  • Unique and proprietary data – updated year-round from published sources and insight gained from industry consultation.
  • Detailed methodology – the report uses research from DW’s Global Upstream Database’, an in-house information system exclusive to DW. Our global analyst team is involved in the gathering and analysis of the upstream market data through primary research and professional networks. A project-by-project review of development prospects drives a data-rich market model.
  • Concise report layout – consistent with DW’s commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of industry background and supporting materials condensed to enable quick review.