Offshore oil & gas production is forecast to grow from 39 million barrels oil equivalent (boe) per day in 2004 to 55 million boe by 2015. From providing around 34% of global oil production and 28% of global gas production in 2004, offshore oil and gas are forecast to reach 39% and 34% respectively by 2015. The full costs to explore, develop and operate offshore oil and gas fields, presently some $111 billion per year, are forecast to total $1,440 billion over the next decade. During this time it is estimated that 200 billion boe will be produced.

These are amongst the results presented in ‘The World Offshore Oil & Gas Forecast’, an important new study of the long-term prospects for the offshore oil & gas industry published by industry analysts Douglas-Westwood. It is projected that the growth in importance of gas, and offshore gas in particular, will drive an unprecedented increase in expenditure on gas infrastructure, including pipelines, LNG plants, gas-to-liquid processing plants, tanker transport, and loading and unloading terminals.

The expenditure forecasts in the report are given in 2004 money assuming continued low inflation. It is also assumed that upward cost pressures from inflation and a higher oil price environment will, as in the past, be roughly counter-balanced by downwards cost pressures through improved technology and better cost cutting strategies. Nevertheless, according to report series editor John Westwood, “over the longer term a sustained increase in oil prices is likely as a global energy supply gap develops and real cost increases materialise which could lead to additional expenditure growth.“