SOURCE: MarketResearch.com

MarketResearch.com

February 07, 2011 09:08 ET

Global Offshore Drilling Expenditure to Reach $64.2 Billion in 2011

ROCKVILLE, MD--(Marketwire - February 7, 2011) -  MarketResearch.com has announced the addition of GlobalData's new report "Oil & Gas Capital Expenditure Outlook 2011" to their collection of Energy market reports. For more information, visit http://www.marketresearch.com/product/display.asp?ProductID=6066841

After witnessing a sharp decline in their capital expenditures in 2009, most companies increased their spending in 2010. We estimate that global oil and gas spending would be up by 14% in 2010 over 2009 after declining by around 18% in 2009 over 2008. Most of the capital spending during the year was from National Oil Companies (NOCs) with strong capital reserves. On the other hand, integrated and independent oil companies opted for a wait and watch strategy during 2010.

Most oil and gas sector companies across the globe are undertaking construction of their capital-intensive upstream, midstream and downstream projects. Accordingly, global capital expenditure is expected to witness strong growth in 2011 at 15%. Most of this growth is driven by growth from NOCs and integrated oil companies, which would contribute 97% of the capex growth in 2011. A positive demand outlook in 2011 is encouraging most integrated companies to increase their capital spending in 2011. The growth is also driven by high refining margins of around $8 per barrel. On the other hand, despite the ease of credit availability, independent companies are cautious about their expenditure in 2011.

The outlook for offshore drilling is encouraging, and the expenditure is expected to continue to increase in 2011. The global offshore drilling expenditure is expected to increase to $58.8 billion in 2010 and $64.2 billion in 2011. The growth is largely driven by investments in Asia-Pacific. The availability of adequate E&P capital from national and integrated oil and gas companies is driving investments in offshore drilling activities. Better seismic and drilling technologies and depleting reserves in onshore areas and shallow waters are the driving forces behind increased drilling activities in deepwater offshore regions, especially in offshore areas of the US Gulf of Mexico (USGOM), Brazil and West Africa. Deep water and subsalt reserve discoveries will further drive investments in the sector.

With huge offshore, sub-salt discoveries, Brazil is poised to transform itself into a major crude oil supplier. The huge potential of these reserves will help Brazil to exert greater economic and political influence in Latin America against other energy majors like Bolivia and Venezuela. Oil and gas discoveries in Brazil have been increasing rapidly in the last two to three years. In 2010 alone, the country witnessed 48 new oil and gas discoveries in its offshore and onshore areas.

Due to its huge subsalt discoveries, Brazil was also invited to join the global oil producers' cartel - Organization of Petroleum Exporting Countries (OPEC).

For more information, visit http://www.marketresearch.com/product/display.asp?ProductID=6066841

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