Project Report
Upstream FIDs to increase in 2024 with focus on deepwater resources
In this article Wood Mackenzie shares 30 projects to reach FID in 2024 , with up to US $ 125 billion in investment and 14 billion barrels of oil equivalent ( boe ) sanctioned .
Text and images by Wood Mackenzie
Up to 30 upstream projects larger than 50 million of barrels of oil equivalent ( boe ) could reach FID in 2024 , an increase from 22 in 2023 , according to a new report from Wood Mackenzie . The Wood Mackenzie report “ Class of 2024 : benchmarking this year ’ s upstream FIDs ” states that project activity will increase this year , with a total of $ US125 billion in investment and the potential for 14 boe up for sanction . “ With many projects delayed or postponed , we expect operators to commit to more projects in 2024 than last year ,” said Ross McGavin , principal analyst at Wood Mackenzie . “ National Oil Companies ( NOCs ) in the Middle East will control the most projects , but the Majors will be busy as well , particularly as they prioritise advantaged deepwater resources .” According to Wood Mackenzie ’ s Lens Upstream , as the number of projects rises in 2024 , project breakevens are projected to fall , with an associated bounce back in returns ( IRRs ) which dipped in 2023 . The class of 2024 projects require an average of US $ 47 / bbl to generate a 15 % IRR , slightly below the class of 2023 ’ s US $ 49 / bbl . The weighted
average IRR for the class of 2024 is 23 %, helped by a higher liquids weighting of 57 % in 2024 , compared to 2023 ’ s 46 % and the five-year average of 51 %. “ The higher liquids weighting and higher long-term price assumptions will improve IRRs for this year ’ s projects ,” said McGavin . “ Most payback periods are less than eight years from FID , as operators focus on rapid execution , lower unproductive capital , and higher returns .”
Emissions intensity below global onstream average
With a significant emphasis on deepwater projects and advantaged barrels , the average emissions intensity for the FID class of 2024 is 13.6 kgCO2e / boe , well below the global upstream average of 21 kgCO2e / boe ( including liquefaction emissions ), according to Wood Mackenzie ’ s Emissions Benchmarking tool . “ New projects are a lever to meet emission reduction goals , especially those focused on deepwater projects that continue to deliver on low emissions intensity and economic returns ,” said McGavin .
Source : Wood Mackenzie Lens and Q1 2024 FID tracker : dataset only includes project with reserves over 50 mmboe . * Project capex is the total committed project spend in the year of FID ( IN YEAR OF fid TERMS – E . G . 2016 projects are shown in 2016 terms .
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Source : Wood Mackenzie ’ s Emissions Benchmarking Tool and Lens Upstream . Project emissions are over the life of the project and 2024 average intensity is weight by resource size . Average Scope 1 & 2 emissions in the year . 2024 from all projects onstream globablly = 21 kgCO2e / boe , which includes liquefaction emissions .
12 Valve World June 2024 www . valve-world . net