The Press and Journal (Aberdeen and Aberdeenshire)
‘Spike’ in North Sea spending is predicted
Subsea Expo: 2023 could be boom year
Equinor projects offshore of the UK and Norway will help bring North Sea spending to its highest level in a decade, according to Westwood Global Energy Group.
Speaking at Subsea Expo in Aberdeen, Westwood offshore energy analyst Dominic Stirling said combined capital and operational expenditure across the North Sea and the rest of Europe would reach nearly £30.6 billion in 2023, the highest level since 2013.
Mr Stirling said: “There is quite a big spike in 2023 and that’s from Equinor’s Rosebank project in the UK and also Equinor’s Wisting project in Norway.”
In 2018, Equinor bought a 40% operated stake in
Rosebank – about 80 miles north-west of Shetland – from Chevron.
The 300 million-barrel project is considered one of the largest untapped discoveries in UK waters, but last year Equinor pushed back the timeline for a final investment decision to May 2022.
The Norwegian energy giant is yet to say when it expects first oil from the development, which consultancy Wood Mackenzie has previously estimated will cost £4.5bn to develop. In the Barents Sea, Wisting is a 440-million-barrel oil discovery which Equinor became operator of in December.
Despite the expected “spike”in 2023, North Sea spending levels are expected to remain largely flat in years ahead.
Westwood’s research showed total spending across Europe will remain between £30bn to £35bn per year from 2020-2022.
However, spending on newly-sanctioned oil and gas projects is largely improving, according to Westwood’s head of consulting Arindam Das, who also spoke at the expo.
Mr Das said: “There is quite a bit of growth in 2020. It’s clear that over the next four years a lot of that will be driven by Brazil
“We’re looking at an average spend of £12bn each year leading into 2023”
and the likes of Nigeria and Australia, but here in the North Sea we’re not actually that far behind.
“We’re looking at an average spend of $12 billion (£9.1bn) each year leading into 2023.”
One of the “projects to look out for” this year in the UK is Siccar Point’s
Cambo development, but a key metric Westwood uses is the number of subsea Christmas tree orders in the pipeline.
The firm expects 122 to be ordered in the UK and 104 in Norway over the next five years.
Mr Stirling added: “Among projects to really look out for this year in the UK, we’ve got the Cambo development from Siccar Point Energy.
“But the key development type in the UK subsea market we expect to see are single or double well tiebacks, as operators try to improve project economics.”