I cannot overstate that 2020 was one of the toughest years on our industry’s ecosystem. The huge scale of the crisis wreaked by the COVID-19 pandemic has affected us all in such an unprecedented way and added a hard-hitting dimension to our industry’s fragile outlook. The prolonged periods of lockdown and the hiatus mandated in several countries, including some of the high-consuming ones, resulted in the largest oil glut ever, which exacerbated the economics severely. The flat oil-supply curve erased almost all the growth of the last decade and has put our endurance, agility, and resilience to a hard test. The offshore segment, from which approximately 33% of global oil production comes, was confronted by this turmoil, and escalating challenges surrounded the viability and sustainability of deepwater developments like never before.
Unlike previous downturns experienced by our industry, the record plunge in oil demand has put the effectiveness of previous measures of recovery, such as deferral of investments or waiting for an upturn in oil prices, under the microscope.
As the headwinds of the pandemic continue reshaping the global economy, our industry, and the deepwater segment in particular, have no time to lose to rock the boat and upend assumptions in the post-COVID-19 world. Imminent substantive changes within the industry are inevitable to reduce uncertainty and risk and to prepare for the new decade and beyond of delivery in light of the rapid evolution of renewables.
Major deepwater operators have made remarkable achievements in lowering the average breakeven price to around $50 per barrel from around $70 per barrel in the past 5 years. Increasing cost savings are vital, and innovative money-saving engineering notions are an essential tactic to achieve a lower breakeven price.
Additional proportionate, strategic, and reinventive initiatives are needed for the deepwater sector to adapt to the new energy landscape and search for new areas of growth. They will govern the future of the sector and differentiate the pioneers from followers.
I am in no doubt that redefining fundamental strategies toward the development of partnerships in joint deepwater projects, embracing cutting-edge fit-for-purpose and cross technologies, and prioritizing net-zero emissions are keys to unlocking transformational gains and leveraging the opportunity to promote a sustainable future for the deepwater sector.
Recommended additional reading at OnePetro: www.onepetro.org.
SPE 200522 - A Novel Deepwater Kick-Control Strategy for Handling Riser Gas Unloading With Data-Driven Parameter Estimation by Qifan Gu, The University of Texas at Austin, et al.
SPE 200429 - Investigation of Permeability Impairment Caused by Asphaltene Precipitation During Gas-Injection EOR in a Major Gulf of Mexico Field by M.R. Fassihi, BHP, et al.
SPE 202296 - Analyzing Critical Elements in Openhole Gravel-Pack-Treatment Design Cycle: Case Study in Indian Ultradeep Water by Vaibhav Gupta, Schlumberger, et al.
Net-zero emissions: main technological, geopolitical, and economic consequences of the new energy scenario