According to the IEA, the…
The giant Groningen gas field…
Giant oilfield services company Schlumberger Ltd (NYSE:SLB) will grow its revenue by $5B in the current year and by a similar amount in 2024 thanks to a recent resurgence in offshore and international drilling. Previously, the company had forecast it would grow its topline by $4.2 billion. SLB also expects to grow EBITDA by $1.5 billion in the current year.
Deepwater production remains the fastest-growing upstream oil and gas segment with production set to increase by 60% by 2030. Ultra-deepwater production is set to continue growing at breakneck speed to account for half of all deepwater production by 2030.
Deepwater production hit 10.4 million boe/d in 2022 from just 300,000 barrels of oil equivalent per day (boe/d) in 1990. Wood Mackenzie has predicted that by the end of the decade, that figure will pass 17 million boe/d
Stocks of offshore oil and gas drillers and producers have gone on a tear after recent contracts broke records, reversing their seven-year downturn that reached its nadir during the Covid-19 pandemic. Rising global petroleum demand, coupled with increasing deepwater exploration and drilling, has been keeping offshore contractors really busy.
Leading with impressive gains is deepwater drilling specialist, Transocean Ltd. (NYSE:RIG), whose stock has gained 95.8% in the year-to-date. RIG stock jumped nearly 10% after the company reported a three-year, $518 million contract to deploy one of its drillships in the Gulf of Mexico, the latest in a series of large transactions announced in recent months. The company has revealed that its aggregate incremental backlog associated with the latest contracts totals ~$1.2, bringing its total backlog to $9.2B. Meanwhile, rig rates have shot up to $480,000 a day, a 50%Y/Y increase and about triple the downturn’s lows.
Other offshore drilling stocks with robust gains are Diamond Offshore Drilling Inc. (NYSE:DO) +64.0% YTD; TechnipFMC Plc. (NYSE:FTI) +74.4%; Seadrill Ltd. (NYSE:SDRL) +61.0%; Noble Corporation Plc (NYSE:NE) +47.7% and Oceaneering International Inc. (NYSE:OII) +43.1%. In contrast, the energy sector’s favorite benchmark, the Energy Select Sector SPDR Fund (XLE), has only managed an 8.1% return in the year-to-date while the broad market benchmark, S&P 500, has gained 19.0% over the timeframe.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.