Oil and Gas Breakbulk & Project Cargo
likely to stay on an upward trajectory in the medium term , according to Norwegian consultant Rystad Energy .
“ The probability of a fast transition away from oil decreases unless we witness breakthroughs in those low-carbon energy carriers that can technically and economically substitute oil ,” Rystad Chief Economist Claudio Galimberti said in an Aug . 13 commentary .
Rystad forecasts $ 100 billion worth of offshore gas projects will be approved in Southeast Asia alone , mostly in Indonesia and Malaysia , between 2024 and 2028 .
But that comes as exploration budgets for new oil and gas resources have flatlined at around $ 15 billion a year since 2020 with no real change likely until at least 2027 , according to data from consultant Wood Mackenzie .
In an October project tracker report , Wood Mackenzie pointed to a raft of reasons for the plateau in exploration spending , including higher supply chain costs and tighter financing as major banks shift their focus to renewable energy from oil and gas .
“ The decline in the number of projects being approved and no expansion in exploration activities will impact
MPV and module carrier operators ,” an energy analyst who asked not to be identified told the Journal of Commerce . “ The good news is continued investment in on- and offshore wind , liquefied natural gas and new energy resources such as ammonia and hydrogen should offset the decline in oil and gas cargo related volumes .”
Global investment in renewable power generation — a broad category that includes wind , solar , nuclear , geothermal , hydro and biomass — is expected to grow 14 % this year , 9 % in 2025 and 5 % in 2026 , according to S & P Global Commodity Insights .
Multipurpose and heavy-lift ( MPV / HL ) carriers including United Heavy Lift and G2 Ocean have reported a steady increase in wind energy-related cargoes , which they say now account for roughly 50 % of their volumes , and Americas-based MPV / HL executives told the Journal of Commerce they ’ ve seen pick up across a range of project types , including LNG , hydro and nuclear .
Several EPCs also noted that cargo is moving or anticipated for domestic projects related to microchip manufacturing and other technologies .
Losing shine
Dip in oil prices pushes oilfield services giants to diversify
By Autumn Cafiero Giusti
With lower oil prices chipping away at their latest quarterly earnings performance , two oilfield services giants are looking to natural gas and deepwater projects to boost long-term growth .
Baker Hughes and SLB , both based in Houston , each posted revenue gains in their third-quarter results in October . But alongside those returns , Baker Hughes reported a double-digit year-over-year decline in overall equipment and technology orders for the period , while SLB ’ s revenue results were dampened by lower commodity prices .
Both companies provide services and equipment for the oil and gas industry and are key drivers of industrial project cargo .
“ Oil markets have recently been impacted by both supply and demand factors , including slowing global economic growth , resilient North American production , weakening OPEC + [ production quota ] compliance , and geopolitical uncertainty in the Middle East ,” Baker Hughes CEO Lorenzo Simonelli said during an Oct . 23 earnings call . “ Even with the uncertain oil macro backdrop , our global upstream spending outlook for this year remains unchanged .”
The price of benchmark West Texas Intermediate
( WTI ) crude oil has slid about 15 % over the past six months , trading near $ 72 per barrel as of Oct . 25 .
Bullish on gas
In choosing which energy sources are best suited to meet global energy demand , which is on pace to grow 10 % by 2040 , Simonelli touted an “ all-of-the-above strategy ” while predicting that natural gas would emerge as the “ clear winner .”
“ It is abundant , low-cost and has lower emissions ,” he said . “ This is the age of gas .”
“ Even with the uncertain oil macro backdrop , our global upstream spending outlook for this year remains unchanged .”
While renewable energy is positioned for “ significant ” growth , Simonelli said natural gas demand is on track to grow by nearly 20 %, with global liquefied natural gas ( LNG ) demand set to increase by 75 % by 2040 .
For the third quarter , Baker Hughes ’ orders fell 22 % year over year to $ 6.7 billion , with declines in both of the company ’ s business segments , oilfield services and equipment and industrial and energy technology .
However , Simonelli cited “ strong demand ” for gas infrastructure projects , with this year ’ s large awards including Master Gas System Three ( MGS3 ) in Saudi Arabia , Hassi R ’ Mel in Algeria and the Margham gas storage facility in Dubai .
12 Journal of Commerce | November 2024 www . joc . com