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Rystad predicts 2022 rebound for oil and gas FIDs

22/09/2020
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Energy market analysts Rystad have predicted that, following the drop in global oil and gas project sanctioning as a result of the Covid-19 pandemic and subsequent fall in oil prices, the total worth of final investment decisions is expected to double next year and even exceed pre-pandemic levels in 2022. 

The Covid-19 pandemic has had a massive impact on the oil and gas industry, but sanction levels are expected to rise again by 2022
(Image via Zachary Theodore  / Unsplash)

According to the firm, offshore commitments for 2020 are expected to reach just $34 billion - way below 2019’s $101 billion. But, they say, offshore projects estimated to reach FID in 2022 are forecasted at $64 billion in 2021 and could be as high as $95 billion by 2022. 

Meanwhile, onshore projects are expected to reach $36 billion in 2021, a sharp rise from this year’s estimates of just $19 billion. By 2022, they could see a steep rise to outstrip offshore commitments with a total of $100 billion.

Chart produced by Rystad to show global project sanctioning predictions until 2022
(Image via Rystad)

Recent commitments highlighted by Rystad as being major contributors to these figures include the Mero-3 project in Brazil (estimated to cost £2.5 billion to first oil), the Payara development off Guyana (estimated at $3.6 billion), the Whale project in the US Gulf of Mexico (including the construction of topsides and a hull of a Floating Production Unit for Shell, originally planned for 2020 but deferred until next year), Gazprom Neft’s Chayandinskoye oil-rim development in Russia (estimated at $1.3 billion) and China Offshore Oil Engineering Co.’s (COOEC) activities on the Luda 6-2 oilfield offshore China, due to start production in early 2022. 

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Rystad predicts 2022 rebound for oil and gas FIDs - Time to read 2 min
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