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Douglas-Westwood comments on long-term growth in drilling

Douglas-Westwood

Douglas-Westwood (DW), a UK-headquartered provider of energy business strategy, research, and commercial due-diligence services, elaborated on its "long-term growth in oil and gas drilling forecast" in its latest edition of DW Monday.

DW’s new Drilling & Production information service is producing some interesting numbers, not least that meeting future global oil and gas demand will require massive numbers of new development wells to be drilled – in 2014, some 83,000, of which 80,000 will be onshore and 3,000 offshore. However, a forecast 17% increase in oil and gas demand by 2020 means that annual well completions will need to climb 35%; in all, an additional 670,000 wells must be drilled by the end of the decade.

Offshore, the developing shallow-water gas and highly productive deepwater sectors will offset the effects of an aging shallow-water oil sector into the forecast, with total offshore oil and gas production set to rise 22% by 2020. DW expects to see a surge of deepwater well completions in the medium term – reaching 476 by 2018, up from 185 in 2013.

New annual onshore well numbers are set to grow 35% by 2020, as more completions are needed to offset ongoing production decline. Worldwide, more drilling for less oil and gas is a recurring theme; the Middle East will need to achieve more than 30% growth in drilling as the national oil companies of the Kingdom of Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates start large redevelopments in the near-term – nevertheless, production will rise just 10% due to the maturing of existing fields. DW noted that the well numbers of the national oil companies will surge as the international oil majors endeavor to rein in their spending.

Greenfield projects (onshore and offshore) in Russia could see production maintained at current levels into the 2020s, although recent diplomatic tensions could affect this considerably. China will invest significantly into output at home and abroad, notably Central Asia, as it looks to satisfy rapidly rising domestic demand.

On a global basis, DW said that much of the drilling is due to the continued resurgence of the dominant North American market (which accounted for 62% of worldwide development wells drilled in 2013).

Due to the fundamental importance of development drilling to the industry, DW announced that it will be starting a new monthly Drilling & Production email service shortly.

 

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