A British energy analytics group said it expects spending for offshore developments to surge after flat-lining in 2016. Photo courtesy of Premiere Oil.
Feb. 26 (UPI) -- Expect a rebound in orders for floating production systems this year as oil and gas companies spend more during a recovery period, a British monitor said.
Lower crude oil prices in previous years had dampened the appetite for spending on long-term and costly efforts offshore. With oil prices roughly 80 percent higher than on this date in 2016, British analytics company Westwood Global Energy Group said it expects tens of billions of dollars in new spending on floating production systems over the next five years.
"This recovery has occurred in part due to an improvement in oil prices and renewed appetite for investment from exploration and companies, while the re-engineering of many projects at the front-end engineering stage has also helped to reduce cost," its report read.
Close to home, Premier Oil last month lifted its first cargo of oil using its floating production, storage and offloading vessel parked over the three fields in the North Sea that make up the Catcher area. A peak rate of around 60,000 barrels of oil per day is expected during the first half of 2018.
Premiere said total project spending is expected to be about $1.6 billion, 29 percent lower than initial estimates.
Westwood said there were 15 new orders for floating production systems last year and 17 more are expected this year. That's up from zero in 2016.
More than 60 orders are expected over the next five years and it will be Latin America that sees the bulk of the new spending with 43 percent of the $51 billion forecast through 2022.
Last month, Total and state-controlled Petróleo Brasileiro, known commonly as Petrobras, finalized a $1.95 billion strategic partnership that gave the French company at least 20 percent of the rights to licenses in the lucrative Santos oil basin off of Brazil's coast.
Using floating production vessels, Total gained a stake in four fields that could combine for 250,000 bpd. About 100,000 bpd is already in production and the rest is expected to come on line gradually through 2019.
