Offshore Oil, Gas to Get More than $200bn in New Investments in Two Years

Emmanuel Addeh in Abuja

The offshore oil and gas sector is set for the highest growth in a decade in the next two years, with $214 billion of new project investments lined up, a Rystad Energy report has shown.

According to the report, the annual greenfield capital expenditure (capex) will break the $100 billion threshold in 2023 and in 2024 – the first of such breach for two straight years since 2012 and 2013.

Offshore activity is expected to account for 68 per cent of all sanctioned conventional hydrocarbons in 2023 and 2024, up from 40 per cent between 2015-2018, the report stated.

“These new investments will be a boon for the offshore services market, with supply chain spending to grow 16 per cent in 2023 and 2024, a decade-high year-on-year increase of $21 billion. Offshore rigs, vessels, subsea and floating production storage and offloading (FPSO) activity are all set to flourish.

“One of the leading global drivers is the sizable expansion of offshore activities in the Middle East. For the first time, offshore upstream spending in the region will surpass all others, lifted by mammoth projects in Saudi Arabia, Qatar and the UAE, ”Rystad noted.

In Nigeria, 15 years after it last put up about 45 deep offshore assets for public bidding, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), in December also announced that the process to invite Nigerian and foreign oil industry players to apply for seven more facilities had begun.

The Commission’s Chief Executive, Mr Gbenga Komolafe, noted that the offshore blocks will be putting on offer assets covering an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m.

The success of the mini bid round, he said, will ensure all stakeholders gain value from the country’s resources, while paying close attention to reduction in carbon emissions, as well as overall Environmental, Social And Governance (ESG) considerations.

THISDAY learnt that the offshore assets are located off the city of Lagos, rather than off the coast of the Niger Delta further to the east where most of the country’s oil industry is concentrated.