Rystad Energy forecasts exponential growth in the next two years for the oil and gas sector. (Source: Shutterstock)
With $214 billion in new project investments coming, Rystad Energy forecasts exponential growth in the next two years for the oil and gas sector. For the first time since 2012 and 2013, yearly greenfield capex will reach over $100 billion, according to research.
Offshore activity is expected to surpass pre-pandemic levels of production in 2023 and 2024, accounting for 68% of total production. This is up from 40% between 2015 and 2018. On the whole, offshore developments will make up half of all sanctioned projects in the next two years, up from just 29% from 2015-2018.
“Offshore oil and gas production isn’t going anywhere, and the sector matters now possibly more than ever,” head of supply chain research at Rystad, Audun Martinsen, said in a press release. “As one of the lower carbon-intensive methods of extracting hydrocarbons, offshore operators and service companies should expect a windfall in the coming years as global superpowers try to reduce their carbon footprint while advancing the energy transition.”
Offshore rigs, vessels, subsea and floating production storage and offloading (FPSO) activity are all set to flourish, reaching a decade-high year-on-year increase of $21 billion. For the first time, offshore upstream spending in the region will surpass all others, due to large projects in the Middle East. And while Saudi Arabia, Qatar and the UAE lead the way in terms of investments, the U.K. and South America are nipping at their heels.
In the next two years, investments in the North Sea from the U.K. and Norway will rise with U.K. and Norwegian offshore spending set to increase by 30% and 22% respectively. In South America, investments in Guyana will total $7 billion as the country looks to establish itself as a powerhouse within the energy sector, while Brazilian upstream spending will reach $23 billion this year.
Looking towards the future, state-owned Petrobras in Brazil plans to deploy 16 FPSOs across six fields before 2030, while growth in the Guyanese Stabroek Block will also contribute to regional expansion. The Middle East is also set to grow and possibly accelerate for the foreseeable future. Despite the growth in Guyana and Brazil, South American spending is expected to slow in 2025.
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