Oil and Gas Breakbulk & Project Cargo
“ There are more sectors — data storage , semi-conductors — it ’ s all new stuff ,” said a project forwarder who asked not to be identified .
Approvals slowing
The number of oil and gas projects receiving a positive final investment decision ( FID ), a prerequisite to cargo movement , has also been dwindling .
Around 20 schemes worth about $ 100 billion are expected to get the FID green light by the end of 2024 , according to Wood Mackenzie , a sharp decrease from a March report in which it estimated 30 upstream projects valued at $ 125 billion would move forward this year . A similar dynamic played out in 2023 , when 23 schemes worth around $ 130 billion received FID approval , against an earlier estimate of 30 projects valued at $ 185 billion .
“ There ’ s been a steady decline in both the total number and overall value of offshore hydrocarbon projects getting FID approval over the last few years , with final investment decisions postponed to subsequent years ,” the energy analyst said . “ There ’ s an undoubted need for the development of new oil and gas resources . But the current energy transition to cleaner fuels like wind and solar is making it more difficult for oil majors and national oil companies to assess when those resources will be needed , which in turn is affecting their financial viability .”
Global oil demand is predicted to peak at around 102 million barrels per day by 2030 , after which demand will ease , according to the International Energy Agency ( IEA ). Low-emissions sources are expected to generate more than half of the world ’ s electricity before 2030 , the intergovernmental organization said in its World Energy Outlook 2024 report , published Oct . 16 .
Maritime classification society DNV predicted global oil demand could peak in 2026 in its 2024 Energy Transition Outlook report , also published in mid-October . Oil major bp said in a July energy forecast demand could fall to less than 80 million barrels per day by 2050 from 101.7 million barrels per day in 2023 amid the shift to cleaner fuels .
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Baker Hughes and SLB are looking to natural gas and renewables to offset declining oil equipment demand . Shutterstock . com
“ We are experiencing a significant increase in gas infrastructure equipment orders and anticipate this trend will continue as many developing economies look to increase the use of natural gas within power generation and industrial applications ,” Simonelli said , adding that this year ’ s non-LNG gas technology equipment orders are expected to double from levels booked in 2023 .
Offshore offsets slump
SLB , formerly known as Schlumberger Ltd ., is counting on long-term projects in international , deepwater and gas markets to prop up future growth amid falling commodity prices that caused customers to rein in spending on short-cycle projects .
SLB posted $ 9.2 billion in quarterly revenues , a 10 % year-over-year increase , according to the company ’ s third-quarter earnings , posted Oct . 18 . Those results were boosted by long-term deepwater and gas projects , CEO Olivier Le Peuch said .
“ This performance was achieved despite an environment
www . joc . com where short-cycle activity growth softened , and some international producers exercised cautious spending triggered by lower oil prices and ample global supply , while land activity in the US remained subdued ,” he said .
Despite the tepid spending , “ most projects are progressing as planned ,” Le Peuch added .
Among recent project awards , SLB OneSubsea — a joint venture SLB formed in 2023 with Norwegian engineering firm Aker Solutions and UK offshore engineering and services provider Subsea7 — won multiple deepwater project contracts from Brazilian oil and gas producer Petrobras , including an Oct . 10 award to develop the Roncador offshore field in Brazil and an Aug . 2 award for two ultra-deepwater projects in Brazil ’ s Santos Basin .
In the United Arab Emirates , SLB is part of a joint venture with UAE-based ADNOC Drilling Company and Patterson-UTI International Holdings that is working to complete the initial 144 wells for a $ 1.7 billion UAE drilling program by the end of 2025 .
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November 2024 | Journal of Commerce 13