Global offshore oil struggles to find its footing: Fuel for Thought

Global offshore oil production has been the most sluggish and recovery resistant sector in the oil industry during the last three years of slumped oil prices, but the arena is showing signs of adaptation and resiliency thanks to new cost-paring measures that in some cases allows offshore projects to compete with shale. The need to reduce costs is not only critical for private companies and national oil companies. The world needs oil from those projects to meet future demand. “The offshore sector, which accounts for almost a third of crude oil production and is a crucial component of future global supplies, has been particularly hard hit by the industry’s slowdown,” the International Energy Agency said in a recent report. “In 2016, only 13% of all conventional resources sanctioned were offshore, compared with more than 40% on average between 2000 and 2015,” IEA said. As the industry adjusts to what could be a lower-for-longer oil price and what investment bank Barclays has called a “new oil paradigm,” the offshore sector is becoming more compact, nimble and phased, Barclays analyst David Anderson told S&P Global Platts. Breakeven prices for offshore projects generally are around $50-$60/b, analysts say, higher than world oil prices

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Source: CTRM Center

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