At least one oil and gas firm has cast a cautionary eye on the long-term outlook for global offshore oil supply.
In an Oct. 28 report, Bernstein Research analysts led by Bob Brackett questioned the view that long-term underinvestment in long cycle, or offshore, projects will eventually be the impetus for a rejuvenation in activity and investment as supply falters. The analysts noted that they expect global offshore production, which is about 27 million barrels of oil per day (bbl/d), to peak in 2020. However, given current underinvestment, they think “it might be a decade [if ever] before it returns to those levels.”
Some of the most significant factors in this scenario are commodity prices that continue to bump around $60 a barrel Brent. Climate change concerns are also driving an increasing focus on renewables by the oil giants who historically have had the muscle to fund major deepwater projects.