The deepwater cost curve: revisited

The deepwater industry appears in good health. The pre-FID cost curve shows sustained cost reductions across the globe since 2014. As a result the average pre-FID project NPV15 breakeven has fallen 37% over the past four years. But how low have costs fallen, and when will they start rising again? We examine the difference between structural and cyclical changes, and which are the most resilient to future price cycles. We also look at different geographical hotspots and a corporate landscape dominated by the big players. Eight companies now control 74% of future pre-FID deepwater spend.