Energy research and business intelligence firm Rystad Energy foresees more than 100 new offshore fossil projects worth US$123 billion receiving approval in 2019, compared to more than 90 in 2018, if companies continue cutting costs and the price of benchmark Brent crude oil hits $60 per barrel.
Rystad is predicting a price of $65 per barrel in the course of the year, Rigzone reports.
“With a rebound to $60 per barrel Brent, 2019’s offshore project sanctioning has the potential to reach its highest level of activity since 2013,” the company says in a statement posted last week. It predicts the Middle East launching the largest number of offshore projects in relatively shallow waters, with South America showing more interest in deepwater drilling.
Rystad says 15% of the projects have breakeven costs above $60 per barrel, the vast majority of them for new fixed and floating offshore oil rigs. “For 2019 to reach its full offshore sanctioning potential, further cost reduction efforts on these projects are needed,” the company adds.