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Deepwater costs continue to plummet-I: Under $ 40/bbl price now possible
Jul 21:
Deepwater production costs are falling at a dramatic pace and it will have massive implications for around $ 15 billion in investments eventually lined up in the KG Basin.
8Costs are already down 30% from 2014.
8A period of aggressive cost compression has brought average breakeven costs for projects down from $70/bbl in 2014 to approximately $40-50/bbl in 1Q 2017
8This breakeven analysis reflects full life-cycle economics that includes government take, development drilling, facilities, equipment, subsea, and operating expenditure with a 10% allowance for return on capital.
8While commercial gains primarily drove 2015 breakeven estimates to $55/bbl, engineering re-designs and efficiency improvements are driving the additional $10-15/bbl impact on breakeven projections for 2017 estimates.
8The focus is now shifting to get to successful execution of $40/bbl or lower breakeven costs
8This will need step changes in efficiency and performance.
8But not impossible.
Click on Reports for a detailed analysis
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8Costs are already down 30% from 2014.
8A period of aggressive cost compression has brought average breakeven costs for projects down from $70/bbl in 2014 to approximately $40-50/bbl in 1Q 2017
8This breakeven analysis reflects full life-cycle economics that includes government take, development drilling, facilities, equipment, subsea, and operating expenditure with a 10% allowance for return on capital.
8While commercial gains primarily drove 2015 breakeven estimates to $55/bbl, engineering re-designs and efficiency improvements are driving the additional $10-15/bbl impact on breakeven projections for 2017 estimates.
8The focus is now shifting to get to successful execution of $40/bbl or lower breakeven costs
8This will need step changes in efficiency and performance.
8But not impossible.
Click on Reports for a detailed analysis
