Oil price rebound may boost O&G contracting

But yards are diversifying into adjacent markets instead of holding out for O&G contracting to return to pre-crash levels

Published Mon, Jan 2, 2017 · 09:50 PM

sembcorp marine

Singapore

A REBOUND in oil prices towards the end of 2016 - if sustained through 2017 - may stimulate a recovery in offshore and marine contracting activity linked to conventional upstream oil and gas (O&G) projects.

But listed yard groups have not been holding their breaths for conventional upstream O&G contracting to ramp up to pre-oil crash levels. Instead, they have sought opportunities from adjacent markets, some of which are driven by a slew of recently introduced regulatory updates.

Opec (Organization of the Petroleum Exporting Countries) and non-Opec members' pact on Dec 10 to cut oil production by almost 1.8 million barrels per day has spurred an oil price rebound to over US$50 towards the year-end. At the time of writing, oil prices were hovering under US$60 as the market waited on signatory member-states to deliver their pledged cuts in the new year. The expectation tha…

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