Publisher: GEOExPro, October Edition
During 2010 to 2014 activity on the North Atlantic region was at an all-time high reaching a peak of 130 billion USD in 2014. Since then the low oil price has reduced activity and spending levels. In 2016, total investments for the region is expected to fall to 75 billion USD.
One of the main reasons for lower activity is the decline in new projects sanctioned. In the beginning of this decade, around 3.5 billon boe of new resources (both oil and gas) was sanctioned yearly. In 2014, the number dropped to 1.7 billion boe. Sanctioning activity increased in 2015 but this was driven by Johan Sverdrup. For the current year sanctioned resources is expected to be 1.3 billion boe; the lowest actively levels in 30 years.
Rystad Energy does not believe this trend will continue and expects to see a pick-up in activity in 2017. The low global activity level observed in 2015 and 2016, has contributed to the re-balance of the oil market, and the expectations of higher future oil prices will make it easier for E&P companies to make positive sanction decisions.
In 2017 the sanctioning resources is expected to reach 2.7 billion boe, twice as much compared to 2016. Norway, the United States and the UK will contribute to this growth, where the main projects are J. Castberg (NO), Lochnagar/Rosebank (UK) and Vito (US). The sanction activity is expected to continue to grow in 2018, and to reach 3.7 billion boe.
The conversion of discovery into development projects is important as it creates activity, increases the value for the E&P companies and shows the need for exploration The Atlantic region has been through a tough period, and this is visible in the sanctioning activity. However, as oil prices are expected to gradually increase, new projects will be sanctioned again.
Espen Erlingsen, VP Analysis
Phone: +47 24 00 42 00
Mobile: + 47 41 44 77 61
Julia Weiss, VP Marketing
Phone: +47 24 00 42 90
Mobile: +47 48 29 87 61
About Rystad Energy
Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.
Rystad Energy’s headquarters are located in Oslo, Norway. Further presence has been established in Norway (Stavanger), the UK (London), USA (New York & Houston), Russia (Moscow), Brazil (Rio de Janeiro) as well as Singapore and Dubai.