The number of greenfield oil and gas projects to get their final investment decision could rise threefold on 2018, Norwegian energy consultancy Rystad Energy has forecast. Most of these will be offshore projects, the author of the study, upstream analyst Readul Islam said.
The number, which only covers conventional oil and gas deposits, could open up production reserves to the tune of 46 billion barrels of oil and gas, including around 14 billion barrels of oil equivalent in deepwater blocks, some 20 billion barrels in shallower waters, and the rest in onshore deposits, Islam said.
The analyst noted “The only supply segment likely to shrink this year is the oil sands, whereas deepwater, offshore shelf and other conventional onshore developments are all poised to show substantial growth. From a geographical perspective, all regions are headed for robust growth except Europe and North America, still bearing in mind that shale plays are not included in these numbers.”
The forecast includes a lot of projects whose final investment decision was delayed because of the 2014 oil price crash, indicating that oil and gas companies have now managed to bring their costs down enough to make these large-scale projects commercially viable. About a quarter of the projects expected to receive a FID this year are ones that have been delayed because of the 2014 slump in oil prices.
Yet there is no certainty that all of these projects will receive their final go-ahead this year. A sharp fall in oil prices could once again put the brakes on many greenfield projects. However, others will go ahead, including a number of liquefied natural gas projects in Africa, Russia, and Australia. In oil, Saudi Arabia will account for about one-fifth of the total new reserves to be tapped this year with the expansion of three offshore projects: Marjan, Zuluf, and Berri.