Manup Industry Roundup - W0523: NEWSL -01
Good morning!
Last year was a double milestone for decarbonizing the world’s energy system. It was the first year when investment in the energy transition equaled global investment in fossil fuels, according to the latest data release from clean energy research group BloombergNEF.
The money flowing into the upstream, midstream and downstream segments of oil and gas, and into fossil fuel-fired power generation without emissions reduction technology, was $1.1 trillion last year. Likewise, annual investment in renewable energy, electrified transport and heat,?energy storage?and other technologies reached $1.1 trillion
Below are the oil and gas stories and news that made headlines this week carefully curated by?Manup.
Summary of the news
$1 Trillion Green Investment Matches Fossil Fuels For The First Time
According to GBloombergNEF (BNEF) in its “Energy Transition Investment Trends 2023 ” report, global investments in the clean energy transition hit $1.1 trillion in 2022, roughly equal to the amount invested in fossil fuel production
Never before has the amount spent on switching to renewable power, electric cars and new energy sources like hydrogen topped $1 trillion.
While the amount represents a 31% jump from 2021, it’s still just a fraction of what’s needed to slash greenhouse gas emissions and fight global warming. BNEF estimates annual investments in the transition must triple for the rest of this decade to give the world a shot at reaching net-zero emissions by 2050.
Solar and wind power accounted for the biggest chunk of 2022 investments, reaching $495 billion, a 17% increase from the previous year. But electric vehicles came in close behind, with $466 billion, and the amount invested in them worldwide is growing far faster, at 54%. Nearly half of all global energy transition investments — $546 billion — were in China, while the US came in second at $141 billion. (Had BNEF counted the European Union as a single entity, it would have ranked second, with $180 billion.)
The $1.1 trillion covers money invested in deploying clean-energy technologies, according to BNEF. It does not include $274 billion spent worldwide last year on expanding and strengthening power grids, $79 billion invested in clean-energy supply chains and manufacturing or $119 billion in equity financing raised by clean-tech companies. Added together, the amount invested in the transition rises to about $1.6 trillion.
That clean power investments essentially tied those in fossil fuels is notable considering investments in those older, polluting energy sources rose in 2022. Driven by high fuel prices, worldwide investment in the sector climbed a substantial $214 billion, according to BNEF.
Offshore Rigs Set For Very Busy Year In 2023
Rig activity stood out in several regions in 2022 and there is no reason to expect anything different in 2023, Westwood Energy believes.
In 2022, offshore rig activity for both jack-ups and floating rigs was robust in several key regions of the world. Global marketed jack-up utilization increased from 87% in January to 91% in December.
In January, 367 of 423 marketed units were contracted or committed for work, while in December the numbers increased to 398 of 437 marketed units contracted or committed for work. From July through December, utilization was above 90%.
The Middle East garnered all the jack-up attention last year and for good reason. Major rig fleet growth for ADES and Arabian Drilling, coupled with over 60 new contract awards from Saudi Aramco and ADNOC Offshore, resulted in a substantial number of long idled and stranded newbuild jack-ups finding work in the form of minimum three to five-year contracts, most of which will commence this year
For 2023, Westwood expects jack-up utilization to remain robust. There will likely be additional contract awards in the Middle East, albeit probably not at the same pace as seen in 2022. In addition, outstanding rig requirements in Southeast Asia and West Africa will help result in a continued tight supply/demand balance in those regions. Contract extensions currently taking place in Mexico will keep utilization there robust.
For the floating rig fleet – semi-submersibles and drillships – marketed utilization ranged from 80% to 90% for all of 2022, settling just under the latter in December. However, there was a stark difference between the two rig types; drillship utilization averaged 93% for the year, while average semi utilization was some 11% lower, at 82%.
Nevertheless, for the year, overall demand increased from 135 units in January to 143 in December, while marketed supply increased by a net of one, ending the year at 162.
Rig demand rose in several regions, with the US Gulf of Mexico and South America both standing out. In the US Gulf, marketed utilization was 100% from February through December, while South America marketed utilization ranged from 94% to 97% for the entire year. Elsewhere, marketed drillship utilization in Africa increased by 10% in 2022, although it was not accomplished by rising demand. For the year, marketed supply declined by three units and demand fell by one, resulting in higher utilization.
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Currently, 83 of the 162 active floating rigs have no availability in 2023. Of the remaining 64 contracted units with a 2023 available date, 28 run until November or December. Twelve of the 64 have options that, if exercised, will extend availability into 2024 or later.
Oil and Gas Security Trends in 2023
Surveillance specialist Senstar has identified three security trends affecting the oil and gas sector in 2023; Ongoing conflicts and physical threats, New artificial intelligence-enhanced technologies, and Remaining vigilant against cybersecurity threats
According to Senstar, the conflict in Ukraine, regional instabilities, and the potential for geopolitical or ecological-based terrorism continues to pose substantial threats to the physical security of oil and gas infrastructure and its personnel. 2022 has unfortunately demonstrated that pipelines, undefended over large distances, are at high risk from sabotage and hot tapping, while facilities and staff, particularly in unstable regions, remain at risk from direct, coordinated attacks
One specific area of focus in 2023 and beyond is the physical security of LNG infrastructure, including plants, export terminals, and regasification facilities. The strategic significance of LNG infrastructure cannot be overstated - in many jurisdictions, physical security systems must be fully certificated before operations can even start, making LNG facilities high-value targets with substantial security requirements
AI Tech, Cybersecurity
Senstar also highlighted that media stories involving new AI technologies received “substantial attention” in 2022 and said this trend will continue this year.
For the oil and gas industry, AI-powered deep learning has the potential to revolutionize all aspects of decision making based on data, from geological surveys to market forecasts to intruder detection,” he said.
At its heart, AI is about adding experiential intelligence to decisions being made based on training from large datasets. For physical security applications, AI-enhanced intelligence will result in security and video surveillance systems making better decisions about what is and is not a threat, avoiding the distractions associated with false positive results
Given their potentially game-changing benefits, AI-enabled applications will continue to make in-roads in the oil and gas industry, especially as applications mature and become easier to deploy. While the physical security of oil and gas infrastructure is a top concern, so too is cybersecurity
Renewables 2022 Global Status Report
Despite the promise of a worldwide green recovery in the wake of the COVID-19 pandemic, this historic opportunity has been lost. REN21’s Renewables 2022 Global Status Report sends a clear warning that the global clean energy transition is not happening, making it unlikely that the world will be able to meet critical climate goals this decade.
The second half of 2021 saw the beginning of the biggest energy crisis in modern history, exacerbated by the Russian Federation’s invasion of Ukraine in early 2022 and unprecedented global commodity shock.
“Although many more governments committed to net zero greenhouse gas emissions in 2021, the reality is that, in response to the energy crisis, most countries have gone back to seeking out new sources of fossil fuels and to burning even more coal, oil and natural gas,” said Rana Adib, REN21 Executive Director. Below are some highlights from the report:
Read the full report?here
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