Exploration and Drilling Costs will Increase by 11% This Year, S&P Global Estimates
The global offshore drilling market appears to be booming.
Analysts at S&P Global expect exploration and production spending to increase by 11% in 2023, while offshore oil and gas activity is forecast to grow by 20% year-on-year.
S&P Global notes:
“The time between signing a contract and the start date of work is increasing, while the time frame of contracts is expanding,” said the CEO of deepwater driller Diamond Offshore. According to him, the company’s average contract length of 360 days has reached its highest level in the last five years.
Valaris, which has both deepwater and shallowwater drilling rigs, sees prospects for rising demand and “constrained” supply in the market.
“Commodity prices remain favorable, with spot Brent crude prices above $85 per barrel supported by limited supply and the recent escalation of geopolitical risks,” added the Valaris CEO.
