Analysts: Offshore Outlook Appears ‘Strong’
“With Brent Blend now commanding only about $60 per barrel, operators still plan to spend more next year and move forward on project sanctioning,” according to Rystad Energy, a Norway-based energy research and consulting firm. “More than 85% of the projects that we expect to be sanctioned in 2019 will generate returns greater than 10% even at current oil prices, as development costs have been reduced by as much as 30% since 2014.”
The market downturn forced oil and gas companies to operate smarter, looking for savings and ways to improve operations with eyes on budgets. Solutions were found in technologies, changed development plans calling for fewer wells or more phases, utilization of existing infrastructure, collaboration, standardization and negotiation for lower rates and service costs.