Editorial
The first six months of 2024 have been a literal scrum of business travel globally, as it seems post-pandemic exhibitions, conferences and events are in hyper-growth mode to recoup lost revenue. I anticipate that 2025 and beyond will result in a culling of the event calendar, as it’s clear that while some events have roared back to life stronger than ever, 50% or more are perceptibly weaker; some a mere shadow of their former selves.
That is a perfect segue to Theresa Wilkie’s column this month on the Saudi Aramaco Jackup story, as the post-pandemic enthusiasm was me squarely with real-world reality.
As Wilkie, the Director of RigLogix @ Westwood writes, Saudi Aramco’s ambitious post-Covid jackup fleet expansion program, in which the operator looked to increase its fleet size from approximately 49 jackups in June 2022 to 90 in just two years, seemed a daring feat but was almost met earlier this year with 89 jackups at work, driving regional and global jackup utilization. However, in January 2024 Saudi Arabia ordered Saudi Aramco to halt its oil expansion plan and to target a maximum sustained production capacity of 12 million barrels per day (bpd), 1 million bpd below a target announced back in 2020. In early April the confirmation of various suspensions started rolling in, finally equating to 22 jackups across eight contractors to date.
Ups and downs are certainly not new in the offshore energy sector, and as another of our regular contributors – Jesper Skjong, Market Analyst, Fearnley Offshore Supply AS – writes, the market for OSVs, while still on a positive trajectory premised on an overall 45% increase spend on E&P from 2021 to 2025 to $200B, that has not been equally felt across all sectors, and in fact the OSV market is now at a stable and healthy level.
Looking at offshore wind in the U.S., the news continues to be a mixed bag with project starts and stops, and the industry as a whole continues to experience predictable growth pains. Barry Parker takes a deep dive into the finances behind offshore wind, writing “While offshore wind projects might be thought of as being in the ‘utility finance’ basket, they are ultimately high-risk deals that might better suit the portfolios of ‘infrastructure investment’ which, in recent years, has taken a shift towards tolerating more uncertainty when it comes to cash flows.”
Regardless of the pace and direction of offshore wind in the U.S., globally the sector is on a bull run, and the future undoubtedly lies in floating solutions that must and will leverage traditional offshore O&G experience. Filling in some of the technical and market blanks here is Philip Lewis, Research Director Intelatus Global Partners, with his article Preparing for Floating Wind – Leveraging the Oil & Gas Supply Chain
Which examines similarities and differences between the deepwater oil & gas and the emerging floating wind segment.
