Houston – Westwood Global Energy 2020 Offshore Rig Market Outlook

Oil prices are on a knife-edge heading into 2020. However, commodity prices are still projected to hold around $60-65 in 2020. This is expected to support investment over the next 12 months, as supermajors are posting strong financials, and many are expected to increase offshore Capex spending next year.

Westwood forecast US$125bn billion of new development expenditure to be sanctioned in 2020. E&P cost control will remain a key theme in 2020, but project lead times are expected to grow, as lower development costs continue to facilitate final investment decisions. Market optimism is increasing, as engagements between E&P companies and the supply chain continue for the optimisation and delivery of various field development concepts.

Meanwhile, the offshore rig market continues to gain momentum, although not as quickly as many had hoped for. Rig utilization is rising moderately as a whole, but some regions have seen more robust gains, and day rates have accordingly increased. For 2020, growth is expected to continue, assuming oil prices remain at or above current levels.

Westwood Global Energy’s Head of RigLogix, Terry Childs, will discuss what is happening in the global offshore rig market, as well as provide a general overview of the subsea market and what can be expected there.

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