Rystad Energy analysis shows that as much as 15 billion USD in increased spending will flow into the non-OPEC shale market in 2017. This incremental change comes after the announced OPEC decision to cut production by 1.2 million bbl/d.
Non-OPEC shale well services are best positioned with an estimated 10 billion USD of additional spending, followed by drilling contractors with 2.5 billion USD assuming 10,000 wells are to be drilled and completed.
“2016 has been an even tougher year than the previous for most service companies, and revenue reductions range from 30% to 50% for onshore North American service companies. OPEC cuts will rescue a lot of these businesses,” says Audun Martinsen, VP Oilfield Service Analysis at Rystad Energy.
The study also shows that offshore suppliers will continue to struggle, with the overall offshore market to be reduced by 19 billion USD in 2017 compared to 2016. EPCI and subsea purchases are heaviest effected with more than 12 billion USD and 4 billion USD of reduced spending, respectively.
“2017 will follow a lot of the trends seen in 2016, with more market consolidation and tighter collaboration between service companies and operators. However, OPEC production cuts will turn the needle on the FID for many projects in shale and offshore, which will eventually generate more transparency on future activity and revenue,” concludes Martinsen.
Visit source siteOPECOilfieldOffshoreFinanceRystad EnergyShale