Rystad Energy has predicted a “strong outlook for contractors” in 2019 with over 100 new offshore projects forecast to be sanctioned globally.
In its latest report, the consultancy said £166 billion is expected to be spent on offshore oilfield services and contractors will begin to see revenues grow again next year.
The value of these investments will be spread across the Middle East (30%), South America (25%), Africa and Asia (15% each), with the remainder in Europe and North America combined.
Head of oilfield service research, Audun Martinsen, said: “The offshore service market is like a super tanker: It takes time to accelerate.
“The uptick in new projects in 2017, 2018 and now 2019 will be enough to turn revenue growth positive to mid-single digits as offshore capex is set to increase due to the recent years of capital commitments. And on top of that comes expected increase in operating expenses.
“Offshore operators are quite trigger-happy on FIDs these days, despite the recent reduction in oil prices. 2018 saw the lowest obtainable unit prices since 2006, as much as 30% down from the peak in 2014, and that makes their cost per barrel and breakeven prices highly favorable.
“Couple that with one of the most profitable years for E&Ps in decades in 2018, and the recent production cut agreement by OPEC and Russia – offshore operators want to focus on field development again.”