Page 58 - Nigeriaone mag 3 edition en

Offshore drilling on the rise

Of course, increased offshore drilling faces strong
resistance from environmental organizations, which
want Majors to stop the drilling, and which also warn
of potential oil spills that would endanger the
environment.
The evolution of global oil demand over the coming
decades of the energy transition will be a key factor
in the profitability of future offshore oil fields.
As for now, exploration and production companies
are not giving up on offshore oil. On the contrary,
they are seeking to develop projects that would pump
oil for years, even decades, at lower costs than other
types of oil development. In general, offshore
profitability costs are lower than onshore
The Brent-equivalent resource-weighted breakeven
point for producing global offshore projects average
is lower compared to global onshore projects already
in production. For projects under development, the
global offshore again exceeds the global onshore in
terms of lower breakeven costs. According to the
methodology, the breakeven point is the flat real oil
price at which continued operation of the assets is
commercially viable.
The Bay du Nord project off Newfoundland and
Labrador, led by Norwegian company Equinor, one
project that could soon be the subject of a final
investment decision (FID), is so far off Canada's
coast that it falls into international waters and would
require Canada to pay royalties to the United
Nations based on project production. While
Deep sea oil drilling vessels
announcing that it was exiting Canada's oil sands,
The current energy crisis in Europe has confirmed BP, the British supermajor also bought out Cenovus
the World’s need for large volumes of fossil fuels. Energy's 35% stake in the Bay du Nord project as it
This results in an expected growth in offshore oil focuses on potential future offshore growth in
and gas drilling and projects in the coming years. Canada.
Major oil companies have approved more offshore Starlee Sykes, BP's senior vice president for the Gulf
projects , including production sites that would be in of Mexico and Canada, commented on the deal in
international waters. June: "This is an important step in our plans to
These companies are looking for massive offshore create a more focused, resilient and competitive
resources that would require large capital business in Canada. Bay du Nord will add significant
expenditures to bring on line. The offshore projects acreage and a discovered resource to our existing
could produce oil for many decades at a lower cost portfolio offshore Newfoundland and Labrador."
due to the magnitude of these massive According to Westwood Global Energy Group, global
developments. All this, in a context of will for an engineering, procurement and construction (EPC)
energy transition and investments in more clean spending in the offshore oil and gas sector is expec-
energy solutions by most majors oil companies. ted to reach $276 billion between 2022 and 2026.

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