According to new analysis from Wood Mackenzie, final investment decisions (FIDs) will be reached for upstream oil and gas projects worth $185 billion to develop 27 billion barrels of oil equivalent (boe).
Furthermore, Wood Mackenzie expects national oil companies (NOCs) to control the largest investment opportunities this year, taking advantage of huge, discovered resources, while boasting the lowest unit costs. The average unit development cost of $7/boe in 2023 is down slightly from 2022.
Fraser McKay, vice president and head of Upstream Analysis for Wood Mackenzie, noted: “Achieving FID on oil and gas projects is harder than it used to be, but with fewer sanctioned in 2022 than was expected, we believe we will see a slight uptick in activity this year, with over 30 of the 40 most viable projects likely to reach this milestone. Most operators will remain disciplined and carbon mitigation will remain a key part of many FID projects.”
International oil companies (IOCs) will focus largely on higher-cost but higher-return deepwater developments, the analysis shows.
“All will be acutely aware of how oil and gas project sanctions are playing out in the public domain and the scrutiny to which their associated emissions will be subject,”added McKay.
