New developments across the international upstream oil and gas sector have pointed to a rapid expansion of output capacity over the coming years. Following the latest round of sanctions on Russian energy companies, prices for oil and gas have skyrocketed, while the majority of nations search for an alternative supplier of the essential upstream energy resource. With several new and a few legacy fields being developed, the output capacity for oil and gas is set to reach new heights over the next decade.
The US is the number one gas producer in the world, for good reason, too
Shell has recently announced the strategic advancement of its US oil and gas portfolio through several projects in the Gulf of Mexico. The company, which has become a cornerstone of the international upstream market, has been developing a strategic framework to expand its already substantial energy portfolio in the US through several new projects and project acquisitions.
The company’s expansion framework for the upstream sector is multi-faceted, with a number of significantly large projects that bolster the company’s output. The Vito Project, which is a legacy project that was commissioned in 2023, has increased the company’s output in the US. Boasting astonishing numbers of operational costs and emission reduction, the project exemplifies Shell’s ambitions.
Shell’s diverse energy portfolio has led the company to the top of the proverbial energy mountain
Another development from the Dutch company is the Final Investment Decision (FID) for a new phased drilling campaign in the Great White unit of the Perdido spar. Shell’s two wells that were drilled in the region faced significant delays, but expectations are that the wells will be completed by the end of the year and bolster the company’s output capacity in the United States.
Europe is also fostering investments in legacy projects across the continent
While the United States dominates the gas market, Europe is planning to increase its upstream output over the coming years as well. Aker Solutions has secured a massive long-term maintenance and modifications (M&M) contract from energy major ConocoPhillips to develop the Eldfisk and Ekofisk fields in Norway, marking the continued expansion of the European upstream market.
The new six-year agreement kicks off in 2026 and provides two additional three-year extensions if necessary. Aker Solutions will handle the brownfield maintenance and modification services and will also provide substantial fabrication work at its Egersund yard. With the US expecting a massive surge in oil and gas production, Europe will need to increase its output capacity to compete with developments emerging from the US market.
“The global offshore industry needs standardized and efficient solutions, executed with speed and precision. Our aim is to reduce costs without compromising safety,” – Paal Eikeseth, executive vice president and head of Aker Solutions’ Life Cycle Business
The rapid expansion of the global upstream market comes as the world’s gas and oil buyers are frantically searching for a new supplier that does not rely on energy resources from Russia, paving the way for the US and Europe to fill the gap left by the huge Russian energy companies that have dominated the market for years.
Expanding the international upstream market requires the cooperation of many countries
The developments in the US and Europe are a step in the right direction that the market requires to meet energy demands across the world. Asia has also been fostering a development phase for its upstream sector. Indonesia has noted that Mubadala Petroleum has moved closer to a final investment decision on the upstream deepwater gas development in the nation. With the renewable energy market picking up steam, the conventional upstream gas and oil market will need to expand to stay relevant.
