A surge in final investment decisions (FID) this year on new petroleum projects worldwide could lead to future production of 46 billion boe, nearly triple future production from projects sanctioned in 2018 — but Canada’s oilsands will be one of the few areas that will see less investment, according to an Oslo-based energy consultancy.
Rystad Energy says, in a report released Friday, new LNG projects in Africa, Australia, the Middle East and Russia will make up one-third of the new projects sanctioned in 2019.
In addition, it says three major offshore projects in Saudi Arabia will dominate FID commitments this year.
“The only supply segment likely to shrink this year is the oilsands, whereas deepwater, offshore shelf and other conventional onshore developments are all poised to show substantial growth,” said Rystand’s upstream research analyst Readul Islam. “From a geographical perspective, all regions are headed for robust growth, except Europe and North America.”
He added that shale and tight oil and gas plays, mostly in North America, were not included in the analysis.
“We expect global FID volumes in 2019 to triple over last year, and 2019 megaproject awards could lead to billions of subcontracting dollars in coming years,” Islam continued.
He said final investment decisions, or so called FIDs, also got off to a good start in 2018 and were on track to outpace 2017. However, a steep drop in oil prices led to several project deferrals in the fourth quarter.
Rystad said three main factors are expected to drive growth this year, including the shift to more LNG investment, catch-up after project deferrals, and Saudi Arabia’s decision to green-light three major offshore projects.
However, Rystad said there are risks to its forecast, including the possibility projects could be deferred in the second half of 2019.
Rystad sees no prospect of major oilsands projects being sanctioned this year.