Operators Show Qualified Commitment To Offshore

摘要

Offshore activity is just a fraction of what it was earlier this decade amid triple-digit oil prices, but producers insist the sector remains a vital piece of their business. To make it work in a depressed price environment, operators have negotiated and engineered their way to some of the most signifi- cant cost deflation the industry has seen this downturn, with one of its largest champions, Royal Dutch Shell, whittling away its deepwater break-even costs to as low as $30 per barrel. But will the commitment wane as service providers try to claw back on pricing that has kept them on the brink despite oil’s recovery? To be sure, service-sector price discounts are not the only way operators have reduced costs, with better project execution and scaled-down developments also big contributors. Consultancy Wood Mackenzie says the average deepwater project sanctioned between 2014 and 2016 started up around 5% under budget, compared to an average 10%-15% over budget across 2006-13. But the bulk of those savings have come at the expense of the service sector’s financial health, with the ax taken to rig rates and costs for engineering and construction services (PIW Oct.15’18).