Mubasher: Offshore expenditure is set to outpace spending on onshore shale activities this year, energy research firm Rystad Energy said.

Despite the recent oil price decline, the offshore service market would expand by a robust 4% this year, while the spending on land rigs, fracking and other services for shale industry would probably remain flat, Rystad predicted.

Since oil prices dropped in the fourth quarter of last year, and the oil market outlook for this year seemed more bearish, shale budgets have been trimmed “drastically” to offset the expected loss of revenues.

“Many would expect offshore spending to be cut as drastically as shale, but offshore budgets were at a 10-year low last year, after four years of intense cost focus, and from that level you don’t need much additional activity or inflation to drive up the market,” Rystad oilfield services research head Audun Martinsen said.

Service companies exposed to the offshore subsea market and the maintenance, modifications and operations (MMO) are expected to reap the benefits of this reversal.

The uptick in offshore spending is projected to be fuelled by exploration and greenfield projects.

In addition, operational expenditure budgets would expand owning to cost inflation, more fields on stream, and a buildup of work that needs to be completed.

A Brent crude price of $64 per barrel (pb) would boost both shale and offshore growth at nearly 5%, according to a new research from Rystad Energy.

However, in the event that Brent hits $70 pb, the shale industry could achieve an impressive 14% growth, the research showed.

By 12:04 pm GMT, global benchmark Brent futures rose 1.21% to $61.92 pb, while US Nymex crude futures climbed 1.40% to $52.80 pb.