According to a recent Wood Mackenzie report, a leaner and more cost-competitive deepwater industry is emerging from the downturn, with the most attractive projects now competing with U.S. tight oil plays.
This year will see a noticeable pickup in deepwater project sanctions, with three projects -- Mad Dog Phase 2, Kaikias and Leviathan -- already fully approved.
Wood Mackenzie estimates that, on average, global deepwater project costs have fallen just over 20 percent since 2014. Assuming a 15-percent internal rate of return hurdle, 5 billion barrels of pre-sanction deepwater reserves now breakeven at $50 or less per boe.
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