Oil industry revives quest for deepwater reserves

HOUSTON: Deepwater oil drilling can be expensive, time-consuming and a hard sell to investors. But the world’s top energy firms are restarting their search for giant oilfields under the ocean after a two-year lull.

A recovery in oil prices to about $50 a barrel from a 12-year low in 2016 is reviving oil majors’ appetite for risk.

Reductions in offshore production costs mean that some projects may be able to compete with North American shale fields,



executives said at an energy conference in Houston this week.

The recovery in the industry has so far been focused on onshore shale output from the largest US oilfield, the Permian Basin.

“Our competition over the past years has evolved from ‘we want to be the best in deepwater’ to ‘we want to compete with shale’ to ‘we want to beat the Permian,’” Wael Sawan, Royal Dutch Shell’s executive vice president for deepwater, said in an interview.