Gas to Head Majors' 2019 Upstream FIDs; GlobalData
Natural gas is set to dominate this year's investment plans, accounting for 70% of the greenfield resources to be developed, according to research by consultancty GlobalData published January 21.
It also found that companies had weathered the market environment through cost cutting, to the extent that they could make money at lower oil and gas prices. The lowish prices at the end of 2018 have not therefore dented their optimism.
GlobalData counted 85 upstream projects up for final investment decisions (FIDs), of which 75 are greenfield developments, with about 42bn barrel of oil equivalent (Bboe) of resources. The other ten are expansion phases.
US major ExxonMobil is leading the project count and forecast investment, the research found. Cost cutting and higher cash reserves from reduced investment over the past few years have led to the increase in FIDs and more optimistic outlook in the industry despite the volatile oil price.
Global Data said: "Russia and Mozambique have the largest projects with scheduled FIDs in 2019, ranked by recoverable resources. These are primarily gas megaprojects intended to supply LNG exports. This trend is reflected in other areas, particularly in the Asia-Pacific region, with major gas developments to feed LNG projects in Australia and Papua New Guinea, and for power demand in Vietnam."
There are two major LNG developments in Mozambique poised to take FID this year, of which one, led by Italian producer Eni and ExxonMobil, says it has concluded sales agreements for the output. a key milestone before announcing FID as it suggests that the project is now financeable. The other project, led by US Anadarko, has said it will take FID in the first half of this year.
Russian projects include Arctic-2 LNG, led by Russian independent Novatek and French Total. They might also include two Gazprom projects: the long-awaited Sakhalin Energy expansion, and Baltic LNG, both of which have so far involved Anglo-Dutch major Shell as a partner.