Colloquy: Projections for 2014 and beyond

January 3, 2014

Nina RachColloquy: Editor’s Column

As we start a new year at OE, we offer projections from companies about projects and markets. This issue features a Global Market Forecast, with analysts from Infield Systems, DouglasWestwood, and Petroleum Geo-Services weighing in about exploration, production, and rigs. Managing Editor Audrey Leon asked industry representatives for their projections on technology trends for our Voices feature.

UK-based Lloyd’s Register Group, QinetiQ, and University of Strathclyde-Glasgow spent two years researching the future of maritime industries, culminating in their report on Global Marine Trends 2030, issued in August 2013.

The authors say the shape of the marine world in 2030 will be driven by interactions between people, economies, and natural resources. They looked at the commercial, energy, and naval sectors and used three scenarios to model the future: Status Quo, Global Commons, and Competing Nations. They describe what maritime trade, sea power, and the offshore energy sectors could look like in 2030. Geopolitical influences will shift.

“Future competitions and conflicts between nations is more likely to involve future competition at sea,” noted Richard Sadler, CEO of Lloyd’s Register.

China - “Barring cataclysmic change, the China factor will still be the big story in 2030. China, consuming three times-asmuch oil as it does today and 60% of the world’s coal, will be the marketplace for maritime trade. The United States will… be the biggest consumer of natural gas.”

China could triple its oil consumption by 2030, moving from about half the level of North American demand in 2011 to 35% more than North America in 2030.

Natural gas demand in China will grow faster than the rest of the world in the next two decades, and natural gas consumption in the Middle East and Europe will overtake oil consumption, the authors say.

Figure from Global Marine Trends 2030.Arctic

The Arctic may hold as much as 25% of the world’s undiscovered petroleum reserves, predominantly off Russia, as shown above, denoted by orange circles. The retreating ice from global warming offers the possibility of new shipping routes and easier access to the Arctic, but technical, economic, and environmental challenges remain. Extreme temperatures, ice floes, and atmospheric icing (frozen spray) require new engineering solutions. Massive investment will be required to build infrastructure. The abundant marine life and pristine wilderness is vulnerable to industrial activity and accidents.

Oil & gas

The energy sector is predominantly influenced by economic development and demand for natural resources. The authors expect global crude oil production to increase 38-63% by 2030, with the majority coming from the Middle East. Other significant and growing sources will be in Brazil, North American unconventionals, Africa, and Russia.

The USA and Russia will be the largest producers of natural gas in 2030, according to the report. Russia’s natural gas production will gradually shift from western to eastern Siberia and the Arctic, while most production growth in the US will come from shale gas.

Image: Figure from Global Marine Trends 2030.

By 2030, 48% of the world’s oil production will be sourced offshore (mostly from deepwater fields), up from 34% in 2004. The authors expect DW production to increase 11.5%/yr, to 8.25million bo/d by 2015, when it will account for 25% of all offshore production, and increase to 45% of all offshore production by 2030. According to the report, natural gas production from offshore reserves is expected to increase from 28% of worldwide production in 2004, to 34% in 2015, and to 42% in 2030.

Renewables - Ocean energy resources include energy from wind, waves, tides, currents, temperature gradients and salinity gradients (osmotic). The authors expect increasing investment in offshore wind technology and a large increase in its power-generating capacity by 2030. They cite wave energy as having the largest potential and note that it can be variously captured, using point absorbers, attenuators, overtopping, oscillating wave surge convertors, and oscillating water columns. OE