Adnoc is investing $25 billion in offshore oil fields

Adnoc is investing $25 billion in offshore oil fields

Marine professionals to meet in Abu Dhabi

01 July 2015

Marine industry professionals will discuss the latest techniques and address multi-faceted production projects taking place in a variety of remote and shallow-water locations as well as complex construction projects at an upcoming conference in Abu Dhabi, UAE.

Seatrade Offshore Marine and Workboats Middle East 2015, a leading event for the workboat and offshore marine industries, will run from October 5 to 7 at the Abu Dhabi National Exhibition Centre.

Vanessa Stephens, managing director, Middle East and Indian Subcontinent, said: “Large international technology-led companies, with advanced drilling and offshore services are demanding more sophisticated fleets to compete for their lucrative contracts. However the nature of the world energy markets is changing and that could impact the number of projects available.”

The opening keynote session will focus specifically on the evaluation of the Gulf region’s dynamic but complex offshore marine industry, in particular the correlation between low oil prices and their effect on exploration and production (E&P) project spending.

Currently Abu Dhabi National Oil Company (Adnoc) is investing $25 billion in offshore oil fields to achieve a part of the UAE energy strategy of increasing its output to 3.5 million barrels per day by 2018, up from the UAE’s current production of 2.8 million barrels per day.

“Research by Barclay’s indicates that international oil companies (IOCs) in the Middle East would increase their E&P 2015 budget spend by over 14 per cent, bucking the worldwide international trend, as those in Saudi Arabia and the UAE would be more willing to accept lower sales prices because, in part, production costs are between $10 and $20 per barrel, compared with much higher shale oil production costs in the US,” said Stephens.

However, in the meantime, the worldwide international trend is forecast by Barclays to decline 9 per cent this year, although some other areas have increased E&P spending including Latin America and Russia, which according to Citigroup energy analysts are up 13 per cent and 11 per cent respectively.

In 2013, E&P spending worldwide hit a record of $644 billion, a seven per cent increase over the previous year’s $604 billion.

Due to falling oil revenues E&P global capital expenditures are now expected to drop to $571 billion in 2015, according to Cowen and Co’s annual study of 476 oil and gas companies’ E&P capex budgets.

“The study assumed an average West Texas Intermediate (WTI) price of $70 per barrel, when in actual fact the average forecast for this year by the US Energy Information Administration (EIA) is $52.48. Only next year (2016) does the EIA expect oil prices to reach an average of $70 per barrel. So that figure could easily drop by a further $28 billion or more,” said Stephens.

Other sessions this year will include a Leaders’ Forum; the Seatrade Technology Forum; a Finance Forum as well as two special regional ‘power hours’ about operational issues in the Caspian with another dedicated to Africa.

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