Magnus Kjemphol Lohne, Management Consultant at Rystad Energy, expects oil prices to reach 80 dollars in 2021.

Global offshore expenditure is expected to flatten out in 2018 followed by growth.

“Things are looking up from 2019. We expect an annual 7-11 per cent increase in global expenditure from 2019 to 2021,” says Magnus Kjemphol Lohne, Management Consultant at Rystad Energy.

Lohne presented Rystad Energy’s Annual Offshore Oil and Gas Market Report, produced for Norwegian Energy Partner (Norwep), at a joint Norwep / GCE NODE seminar in Kristiansand Wednesday.

“We expect to see growth in all five segments of offshore oil and gas: Operations, Well, EPC/Topside Equipment, Subsea and Reservoir/Seismic. In the well segment, we predict 4 per cent annual growth in the period 2018-2021,” says Lohne.

In the same period, Brazil, Norway, US Gulf of Mexico and UK are expected to be the 4 offshore upstream markets with the highest activity.

“Total global expenditure is estimated to reach approximately USD 700 billion, of which approximately 26 per cent is related to drilling/well,” says Lohne.

Rystad Energy expects oil prices to reach 80 dollars per barrel in 2021. The latest Rystad oil price estimates are:

2018: 57 dollar
2019: 62 dollar
2020: 72 dollar
2021: 80 dollar

Breakeven levels in new projects have come considerably down. According to Rystad, today’s offshore breakeven prices are 40-60 per cent lower than in 2013. Shale and oil sand projects have reduced breakeven levels from 80 to 50 dollar per barrel.

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