Upstream final investment decisions (FID) have bounced back in 2017 with the trend expected to continue during 2018.
However, as the number of FIDs reached more than double compared to the year 2016, the average capital expenditure for major projects was cut in half from $5.5 billion over the last decade to $2.7 billion in 2017, natural resources consultancy WoodMackenzie notes.
The LNG industry could bring a shift to the trend in 2019 with major projects, including the Mozambique LNG and Canada LNG, expected to reach final investment decisions.
Adding to that are multi-billion boe expansion projects in Qatar and Papua New Guinea, WoodMac said.
The consultancy also said that, with the reduction of project footprints and use of existing infrastructure, projects have achieved lower costs, lower breakevens and higher prices.
WoodMac warns of possible cost blow-outs should companies all rush to reach FIDs at the same time, noting it is possible some of the big LNG projects could still eye an end-2018 decision to secure lower costs.
The consultancy predicts some 30 projects to reach final investment decisions during 2018 adding that six have already been given a green light during the first quarter.