6 | MARKET DATA
Offshore market: weak with firmer outlook Bourbon Evolution 801 in operation offshore Nigeria
The market may have finally reached the bottom, with observers noting a slow trend towards rebalancing and improved usage rates
Offshore Support Journal | May 2019
O
ffshore oil production is projected to rise by 3.3% in 2019 and 0.6% in 2020 to reach 26.3m bpd (27% of oil production), while offshore gas production will increase by 3.5% and 3.6% in 2019 and 2020 respectively, to 130bn cfd (33% of gas production). The data, from Clarkson Research, also suggests the number of reported offshore field start-ups (39 in 2018) and field discoveries (70) have both reached long-term lows, though a small uptick in discoveries in 2019 is now expected. In the longer term, lower offshore break-even costs and the replacement of ‘lost barrels’ should support field development activity, albeit set against a stronger US onshore outlook.
Rig utilisation is continuing to edge forward, rising 3% in 2018 to 69%, with 470 rigs active. To date, an increase in Jack-Up activity (up 7% year-on-year (yoy)) has not been matched by Floaters (down 5% yoy), although nearly 40% of the Floater fleet has now been retired since 2014. Progress continues around consolidation, rig retirements, S&P activity and solutions for ‘stranded’ newbuilds. Rate progress is moderate and regionally mixed, aside from a doubling of harsh semi-sub rates. The OSV sector may have turned a corner in 2018, with improvements in the number of working boats (up 84 to 2,076), utilisation (up 2% yoy, to 58% globally) and rates persisting into 2019, according to Clarkson Research.
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