“The changing situation in energy supplies has major implications for governments worldwide. The present reliance on oil must be reduced; natural gas and renewables will have to be used to fill the forthcoming energy gap, a massive energy conservation drive is needed and it is becoming increasingly likely that nuclear energy will have to be resurrected,” said Westwood.
“Oil demand from the developing economies has more than doubled over the past decade and supply restrictions are now evident. Analysis for ‘The World Oil Supply Report’ shows that it is increasingly likely that oil supplies will peak, possibly within a decade and governments must acknowledge this scenario as the economic consequences are considerable.
“Over the past few years the world’s oil majors were focussed on gaining reserves by ‘exploration on Wall Street’ rather than exploration offshore with the result that depleting reserves are not being replaced. There is now a need to greatly increase exploration spending to boost reserves and future production prospects.
Global offshore expenditure on field developments and operational expenditure is, however, set to continue its overall growth, but this will be particularly focussed on deepwater deposits; with an increasing spend on subsea production and floating production.
Westwood added that growth in demand for natural gas is outstripping that of oil and depletion of reserves in countries such as the UK and the US. This means that activity is focussed on long-distance subsea pipelines. This coupled with the increasing activity in deepwater means that top-of-the-market pipeline installation vessels will be in high demand.
However, much gas is economically stranded and at present liquefaction offers the only real solution. Investment in LNG plants, LNG tankers and import terminals is set to boom. Analysis for ‘The World LNG Report’ indicates a 40% growth in spend over the next few years to exceed US$10 billion per annum.
In a series of reports Westwood-Douglas also predicted massive growth in expenditure on renewable sources of energy, with windpower, tidal power and biomass leading the field of alternative producers.
“Renewable energy has prospects for strong growth, particularly windpower. In the UK alone some 118MW have been commissioned in the first half of 2004 and a further 200MW are planned. Over the next five years it is estimated that some US$80 billion will be spent on windpower installations worldwide,” said Westwood.
The company’s report ‘The World Offshore Wind Database’ suggests a spend of nearly US$10 billion over the next five years. The immediate growth market is the UK with 499 turbines forecast to be installed offshore followed by Germany with 558.
Additionally, although only in its embryonic stage, wind and tidal power is expected to draw over US$150 million in investment per annum by 2006, while large-scale biomass plants are estimated to attract expenditure of US$1.3 billion in 2004 to US$2 billion by 2010.
