Name of the Report :
Offshore Drilling Industry to 2016 - Rapidly Rising Demand
for Hydrocarbons Expected to Boost Offshore Drilling in
Ultra-Deepwater and Harsh-weather Environments

Publication Date : December 2011

Summary

Offshore Drilling Industry to 2016 - Rapidly Rising Demand for Hydrocarbons
Expected to Boost Offshore Drilling in Ultra-Deepwater and Harsh-Weather
Environments”. The study, which is an offering from the company’s Energy
Research Group, provides an in-depth analysis of the global offshore drilling
industry and highlights various concerns, key trends and challenges, along
with major companies in the industry. The report provides forecasts for the
offshore drilling industry to 2016. It also provides offshore drilling forecasts
worldwide by individual region, and provides comprehensive statistics and
key data such as break-up of the offshore drilling expenditure, by water
depth. The report also provides in-depth statistics and details on the current
offshore rig deployment scenario worldwide, by individual rig name, for every
major rig type. The report also provides information on the major offshore
drilling companies operating worldwide. The report is built using data and
information sourced from proprietary databases, primary and secondary
research, and in-house analysis by the team of industry experts.

The production from offshore regions accounts for an increasing share of the
total world oil and gas production. Offshore crude oil production accounts for
around 30% or more of the total global crude oil production. Also, offshore
natural gas production accounts for about a quarter of the total world natural
gas production.

In the recent decade, the offshore crude oil industry has witnessed consistent
growth in production. The global crude oil production from offshore resources is
expected to increase in the near future, mainly due to an increase in offshore
production from major offshore regions worldwide, such as deepwater US Gulf
of Mexico, offshore Brazil, offshore Africa. offshore India, China and Australia,
and also offshore regions in the European regions. In the past decade, offshore
drilling activity has picked up pace worldwide, as an increased effort to meet
energy needs.

The growth of the offshore drilling market is being driven by high demand and
rising prices of crude oil and natural gas. However, the global offshore drilling
market experienced a temporary slowdown in 2009 as a result of relatively
fewer investments by offshore exploration companies in that year, due to the
global financial crisis and the subsequent fall in demand. However, the period
2012-2016 for offshore drilling worldwide is expected to be encouraging
considering aggressive offshore E&P activity expected in regions worldwide.
This is a result of ambitious plans by international oil companies, national oil
companies and governments worldwide to boost the search for fresh discoveries
of hydrocarbons; with the predicted recovery of the industry from the financial
slowdown meaning that drilling expenditure is expected to steadily rise until 2016.

Stringent Policies by Regulatory Bodies are expected to better Offshore
Drilling Operations with regard to Meticulous Compliance of Environment
and Safety Norms

Rigorous regulatory norms imposed on E&P companies and offshore drilling
contractors by offshore regulatory bodies of governments worldwide are expected
to make a positive change in terms of making the operational environment safe
and environmentally sensitive in the offshore drilling industry.

The Chinese government has called for increased safety checks on all E&P
activity being carried out in offshore China and has stalled the approval of
environmental impact plans for new wells. Also, E&P companies in China would
additionally require to re-apply for certification of new exploration and production
machinery and equipment.

The subsequent rise in regulatory stringency in China could potentially mean a
delayed E&P and offshore drilling activity in the region, thereby reducing hydrocarbon
production considerably.

Recently in September 2011, Michael Bromwich, chief of the director of the
Bureau of Ocean Energy Management, Regulation and Enforcement (USBOEMRE),
stated that despite the USBOEMRE equipped with a staff deficient in size enough
to handle the existing workload and an increasingly stringent and rigorous review
and analysis of the fresh applications related to offshore exploration and production
permits, the regulatory body was taking sufficient measures to ensure
stringent safety norm related checks before making offshore drilling permits available,
as well as simultaneously coping up in terms of speed with regard to providing
permits for fresh exploration and drilling.

Rising Demand for Hydrocarbons is Expected to Boost Offshore Drilling in
Geographically Challenging and Remote Regions such as the Arctic Sea

The increasing need for fresh successful discoveries of offshore reserves has been
pushing the global exploration areas to the geographically challenging Arctic
regions. Recently, the oil and gas regulatory body of Canada, the National Energy
Board (NEB) has been extensively reviewing safety and environmental requisites.
Since 2010, NEB has been collaborating with other regulatory bodies, environmental
bodies, oil and gas super majors, and scientists from the upstream oil and gas
sector in an effort to understand safety, environmental, and probable technical issues
to implement an effective, efficient and safe offshore technology for its exploration
and production (E&P) operations in the Arctic waters.

In the near future, many exploration companies are expected to commence offshore
drilling operations in the Beaufort Sea as they have purchased exploration rights in
these offshore areas. For instance, Imperial Oil has planned a budget allocation of
around $600 million for its drilling operations in Arctic waters. Also, currently exploratory
drilling has already commenced near Denmark’s offshore areas – a fact that could
boost Canadian as well as Russian interests in offshore Arctic region.

It should be noted that technology-based findings have asserted that in the event of an
oil spill in offshore Arctic region, the clean-up procedure would pose significant
challenges, and an extremely low recovery of leaked hydrocarbons due to a recovery
challenge in ice-filled waters could cause substantial damage to the ecosystem, besides
monetary losses. Also, in the case of an oil spill in the Arctic Ocean, sub-zero
temperatures which cause moving ice formations and storms and hurricanes would
tend to make the clean-up process tedious.

Successful Deepwater Explorations Worldwide Resulting In Fresh Discoveries Are
Expected to Boost the Offshore Drilling Activity

An observed trend is a shift towards an increase in deepwater exploration and drilling
and also in geographically challenging areas such as the Arctic region, as more and
more international as well as national oil companies are successfully venturing into
deepwater and remote region exploration and production for finding huge oil and gas
reserves.

It could also be noted that offshore technology advances encouraging deepwater and
harsh environment drilling which lead to an enhanced efficiency of offshore operations
and subsequent reduction in operational costs are likely to boost ambitious plans by
international oil companies and national oil companies (NOCs) to drill in remote
offshore areas in the search of fresh reserves of oil and gas. For instance, deepwater
Brazil, offshore West Africa, the Krishna Godavari deepwater basin located on the
eastern coast of India, and the US Gulf of Mexico along with some specific basins
identified in the Arctic Sea are proving to be a hotbed in terms of offshore drilling activity
and expenditure, especially in deepwater and geographically challenging offshore areas.
Hence, deepwater activity is expected to grow substantially in the period 2012 to 2016,
considering aggressive steps by E&P companies worldwide to drill for fresh hydrocarbon
reserves in deeper waters.

To order this report, please send an email to mail@worldoils.com

Disclaimer
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without the prior permission of the publisher.

The facts of this report are believed to be correct at the time of publication but cannot be
guaranteed. Please note that the findings, conclusions and recommendations that the
publisher delivers will be based on information gathered in good faith from both primary
and secondary sources, whose accuracy we are not always in a position to guarantee.
As such the publisher accept no liability whatever for actions taken based on any
information that may subsequently prove to be incorrect.

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