A surge in final investment decisions (FIDs) this year on new petroleum projects worldwide could see sanctioned volumes of oil and gas – excluding shale and tight oil and gas prospects – nearly triple compared to last year’s tally.
The collective volumes could swell past 46 billion barrels of oil equivalent (boe), according to research conducted by Rystad Energy.
“We expect global FID volumes in 2019 to triple over last year, and 2019’s megaproject awards could lead to billions of subcontracting dollars in coming years,” said Rystad Energy upstream research analyst Readul Islam.
He added: “The only supply segment likely to shrink this year is the oil sands, whereas deepwater, offshore shelf and other conventional onshore developments are all poised to show substantial growth. From a geographical perspective, all regions are headed for robust growth except Europe and North America, still bearing in mind that shale plays are not included in these numbers.”
Final investment decisions, or so-called FIDs, got off to a good start in the first half of 2018 and were on track to outpace the tally for 2017, but several project deferrals during the fourth quarter – coinciding with a steep drop in oil prices – prevented that from happening.
Rystad Energy does not expect that the 2019 FID surge will result in a proportionate increase in contracting opportunities for the oilfield service (OFS) sector. When considering fields of 25 million boe and above, which accounts for more than 97% of the forecast volume, there’s an increase of less than 12% to the 2019 FID count in relation to the number of individual projects sanctioned in 2018.
The silver lining for many suppliers as they navigate an ultra-competitive landscape is that the huge projects sanctioned during 2019 will generate contracts worth billions of dollars for facilities and services in the years to follow.