Offshore staff
NEW YORK CITY – With the first wave of earnings season ending, the longevity of the international and offshore upcycle continues to provide growth and margin expansion opportunities, according to Evercore ISI’s latest Offshore Oracle report.
The oilfield service providers earnings reports also indicate “robust” free cash flow generation, translating to an incremental cash return to shareholders, says Evercore ISI.
Meanwhile, “new energy momentum continues in key focus areas, including CCUS, hydrogen, geothermal, and emissions reduction,” according to the report.
Upstream activity in North America is expected to remain flat in 2024, says Evercore, but this will “largely offset by robust growth internationally.”
In the Middle East, Saudi Arabia’s decision to defer two oil projects earlier in the year may have put a damper on expectations. But the new expected FID date for the Safaniyah project is July 2026 and the date for Manifa is February 2027, Evercore said, citing a Wood Mackenzie report.
In addition, while the project deferments may have “raised some concerns” about the Middle East outlook, the report also commented that the shift in interest in growing unconventional gas production in the Middle East and Eastern Mediterranean regions “should largely alleviate concerns.”
Further, natural gas production in Saudi Arabia is expected to grow by 60% by 2030, a trend that “will warrant significant investment in gas infrastructure.” The shift in focus to natural gas will in turn drive incremental opportunities for integrated and diversified oilfield services companies, Evercore said.
04.29.2024
