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MARINE | Deepwater risk In association with Envista
The new frontier: Deepwater exploration
The market for deepwater and ultra-deepwater exploration and production is forecasted to continue growing rapidly over the next several years. These projects require technological and infrastructure advancements from this new frontier. Michael Venturella, Practice Leader-Marine Group, (Top left) and Guillermo Ramirez, (Bottom left) Principal Engineer-Major Loss, of Envista Forensics provide an analysis of potential risks for insurers to consider Deepwater offshore oil and gas exploration and production takes place at depths of 1,640 feet or more. Ultra-deepwater activities involve depths over 4,921 feet. Deepwater operations present unique challenges involving changes to offshore rigs, support vessels, and technology, which become further complicated in an ultra-deepwater environment.
MARKET SUPPORTS GROWTH The US Energy Information Administration Short-Term Energy Outlook produced in June 2021 demonstrates that world fuel consumption, which dipped slightly during the COVID-19 pandemic, will continue to increase beyond pre-pandemic numbers by the year 2022. The Marine Insurer Claims Edition | September 2021
The 2022 forecast of 101.31 million barrels per day will increasingly come from deepwater production. Global deepwater production has grown 13% annually since 1990, as the depth of unexplored fields gets deeper. Wood Mackenzie, a global research and consultancy business, forecasts that by 2023 more than half of the deepwater production will be ultra-deepwater, with Brazil, Guyana, and the US leading the way. Through cost-cutting and efficiency gains, deepwater projects experienced cost reductions of approximately 30-40% between 2014 and 2017 per Mordor Intelligence, a market intelligence organisation. Oil prices have rebounded and, combined with this cost reduction, has made additional deepwater projects viable options.
