Commitments for offshore Oil and Gas projects are expected to not only recover going forward, but also reach a new record in the five-year period toward 2025, according to Rystad Energy.
The energy research firm has defined in its analysis a project as ‘committed’ when more than 25 percent of its overall greenfield capital expenditure (capex) is awarded through contracts.
Offshore oil and gas development is not only set to recover from the pandemic shock to prices and demand, which forced operators to slash development expenditures and delay projects. It is set for a new record in project commitments in the five-year period to 2025, according to Rystad Energy.
Offshore oil has already started to show signs of emerging from last year’s crisis, as costs have been slashed since the previous downturn of 2015-2016. Deepwater oil breakevens have dropped to below those of U.S. shale supply, making deepwater one of the cheapest new sources of oil supply globally, Rystad Energy said last year.
