Offshore Oil Spending to Rise More Than 20% This Year

Offshore oil and gas exploration spending will increase more than 20% globally this year and the growth will continue into the next, oilfield services firm SLB said on Wednesday.

“Offshore is experiencing a renaissance, with significant breadth and anticipated durability,” SLB Chief Executive Olivier Le Peuch said at the JP Morgan Energy Power and Renewable Conference, according to a draft of the speech posted on the company’s website.

SLB, the world’s largest oil services and equipment provider, said it expects to see a long tail of activity with 65 lease rounds concluding globally this year, in addition to several countries awarding leases through open-door policies.

“This year, we anticipate offshore exploration spend to increase more than 20%,” Le Peuch said.

Between 2022 and 2025, the former Schlumberger expects more than $500 million in investment decisions, a 90% increase over the 2016-2019 period.

The growth will be driven by large development projects in Guyana, Brazil and the Middle East, production capacity expansions in Africa and a return of exploration and appraisal in newer offshore provinces of Namibia, Tanzania, Colombia, India and the East Mediterranean.

The company, which gets 50% of its international revenue from offshore, said the resurgence of offshore will help its well construction, reservoir performance and production systems.

International business accounted for about 76% of SLB’s revenue at about $6 billion in the first quarter.

(Reuters – Reporting by Arathy Somasekhar; editing by Philippa Fletcher)