Expenditure within the Asia-Pacific offshore drilling market is set to increase from a valuation of $16 billion in 2011, to hit a market value of $24 billion by 2016, with an expected deepwater spend of $14 billion in the final year.
The depletion of the reserves in onshore and shallow waters and the advancement in seismic and drilling technologies are driving the increased drilling activities in deepwater offshore regions. The discovery of deep water and subsalt reserves is expected to drive investments in the sector.
As a result of the increasing demand and the decline of the reserves of crude oil and natural gas, the prices of crude oil and natural gas are expected to continue to rise. However, factors such as decreases in service costs as the offshore regions mature, and advances in technology leading to increased efficiency and a reduction in extraction costs, will combine to reduce the total investments.
Nonetheless, the positive factors leading to increases in investments are likely to outweigh the negative factors, thereby significantly increasing offshore drilling expenditure in the future.
The big spending of oil and gas firms and a focus on deepwater drilling will see Australia overtake Qatar as the biggest global producer of Liquefied Natural Gas (LNG) by 2017. Domestic and regional demand has spurred Australia to intensify deepwater natural gas production from the country's abundant offshore reserves.
Deepwater drilling is regarded as a highly rewarding but expensive and risky endeavour. Australia's offshore drilling expenditure in 2011 was $1.9 billion - $1.3 billion of which was dedicated to deepwater hydrocarbon production.
This segment has been predicted to grow to $2.5 billion by just 2016, while shallow water expenditure will exhibit minimal growth, increasing by just $0.06 billion during the same period.
Offshore drilling in Australia has intensified since the economic catastrophe of 2008, in 2009 72 wells were drilled, but this figure has increased steadily each year and by 2016 is expected to reach 153.
For more information on the Asia-Pacific offshore drilling market, see the latest research: Asia-Pacific Offshore Drilling Market
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