Marine Log - June 2008 - (Page 49)

OFFSHOREVESSELS oil and gas prices, Platou expects a strong increase in E & P spending for 2008. Platou estimates that both the total Mobile Offshore Drilling Unit (MODU) fleet and demand increased by 3% in 2007. Demand growth was especially strong in exploration. In the last few years, development drilling has had priority, but declining reserves are triggering oil and gas companies to put more emphasis on exploration drilling. The main constraint is not money but rather availability of promising acreage to the major international oil and gas companies in competition with large state controlled operators, says Platou. Floater market developments 1998-2007 Source: R.S.Platou define this discovery’s size and commercial viability. Petrobras says the result confirms the potential of significant oil reserves in this type of reservoir in the Gulf of Mexico. Pumping gas into your SUV at $4 a gallon, you may wonder why it’s taken so long for oil companies to get into the ultra-deepwater. Unfortunately, the price per barrel of oil has to be pretty high to justify the costs of ultra-deepwater exploration. Be that as it may, ultra-deepwater projects that are approaching production today have spent many years in gestation. There are a limited number of rigs capable of working in the depths involved. However, the pieces are now coming together for much more activity in the ultra-deepwater. THE MARKET Let’s take a look at what’s been happening in the offshore drilling unit market, as recorded in the Platou Report, which sees 2007 “as another excellent year.” In general, the main factors driving rig demand were further strengthened in 2007. Initial estimates point to a hefty 18% increase in E & P spending in 2007 over 2006, but still below the 23% increase seen in 2006 over 2005. The 2007 increase in spending was significantly higher than the 10% increase originally budgeted. As in 2006, says the Platou Report the E & P industry has faced severe resource constraints in 2007. In order to carry out planned activity, the oil and gas companies had to compete for available equipment and resources, fueling the upward price spiral. The constraints manifested themselves in lack of engineering capacity and limited contractor fabrication capacity of steel structures, as well as process equipment and subsea equipment. On the back of higher www.marinelog.com JUNE 2008 YEARBOOK MARINE LOG 49 http://www.tnghph.com.mx/ingles/index.htm http://www.tnghph.com.mx/ingles/index.htm http://www.marinelog.com

Table of Contents Feed for the Digital Edition of Marine Log - June 2008

Marine Log - June 2008 Contents Editorial Second Thoughts Update Inside Washington Innovation Needed to Meet Crew Shortage Optimism Abounds Despite Slowing Economy Can Shipping's Shopaholics Keep Up the Buying Binge? Can Congress Keep Navy Shipbuilding Off the Rocks? Fitting the Ultra-deepwater Pieces Together Generation Next Higher Demand, Higher Prices Demand Up For Large Combination Vessels The Dirty Truth About Emissions SSAS: Realizing Its Potential Fuel Saving Technology Newsmakers Tech News Contracts Events Buyer's Guide Website Directory ML Marketplace Tech Talk

Marine Log - June 2008

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