Offshore Field Development Capex Projected to Hit US$137bn in 2026, Westwood Reports

Published: 6 August 2026

Global offshore field development capital expenditure is forecast to reach US$137 billion in 2026 as operators maintain their commitment to long-cycle projects — developments that typically span five to seven years from sanction to first production, meaning today's investment decisions will shape hydrocarbon supply well into the 2030s — according to the latest insight from Westwood Global Energy Group.

Despite geopolitical disruption and oil price volatility, operators have continued to pursue long-cycle offshore developments, with particular emphasis on deepwater and floating platform projects. Contracting activity began slowly in early 2026, but both the floating production systems (FPS) and subsea markets strengthened materially during the second quarter, indicating a clear acceleration in offshore award momentum heading into the second half of the year.

Westwood recorded 38 offshore field final investment decisions (FIDs) in the first half of 2026, representing a 90% increase compared with 1H 2025. Total committed offshore field development capex reached US$66.4 billion — more than three times the figure recorded a year earlier. FPS engineering, procurement, and construction (EPC) awards accounted for approximately US$12.9 billion across eight units, while subsea EPC awards reached US$5.6 billion.

For 2H 2026, Westwood forecasts continued strong investment, with US$70.5 billion in committed offshore oil and gas field development capex and more than US$30 billion in additional FPS and subsea EPC awards anticipated over the period. Energy security imperatives, reinforced by the global energy supply disruptions of 2022, competitive deepwater project economics, and growing operator confidence in offshore resources as a dependable long-term supply source remain the primary drivers. A broader geographic distribution of awards and improving supply chain performance suggest the current cycle is becoming more balanced, resilient, and less reliant on a narrow set of regions or operators.

Field Development Costs Rise 30%

Offshore field development capex for 2026 is estimated at US$137 billion, a 30% increase from US$105.2 billion in 2025. This figure encompasses drilling and completion costs, subsea and platform engineering, procurement, construction, installation, and commissioning (EPCIC) work scopes, along with other development-related expenditures such as project management, logistics, marine support, and contingency.

The increase reflects a materially stronger offshore investment cycle, but equally significant is the improved cadence of spending. In 2025, offshore capex was heavily concentrated in the second half, which accounted for 80% of annual committed investment. By contrast, 2026 spending is more evenly distributed, with US$66.4 billion in 1H and US$70.5 billion projected for 2H, suggesting a more sustained sanctioning environment rather than a year-end surge.

The regional investment mix has also shifted. In 2025, committed offshore oil and gas investment was led by the Middle East, driven by QatarEnergy, Saudi Aramco, and TPAO through large-scale fixed platform developments and brownfield capacity expansion. The Middle East accounted for US$34.8 billion — roughly one-third of global capex. Latin America followed with US$23.5 billion, while Asia contributed US$16.6 billion.

In 2026, the investment landscape is notably more diversified. Latin America has emerged as the largest regional market at US$28.5 billion, narrowly ahead of Asia and North America, each at US$26 billion. Africa contributes US$23.3 billion, while the Middle East declines to US$22.8 billion. The softer Middle East profile in 1H 2026 reflects a more cautious sanctioning environment, partly attributable to geopolitical uncertainty surrounding the US–Israel–Iran conflict, as well as a reallocation of global capital toward LNG-linked and deepwater floating developments. Major Middle East projects, including Durra, Maydan Mahzam, and Umm Shaif Gas Cap, remain weighted toward 2H 2026 or later.

From a segment perspective, the most pronounced structural shift is the surge in floating platform EPC award value, rising from US$15.6 billion in 2025 to US$37.7 billion in 2026, as operators increasingly target reservoirs in water depths where fixed platforms are technically impractical and cost-prohibitive. Drilling and completion expenditure declined from US$26.7 billion to US$23.5 billion, and fixed platform EPC fell modestly from US$14.9 billion to US$13.8 billion due to project sanctioning delays in the Middle East. Subsea equipment EPC remained broadly stable at US$17 billion.

FPS Market Enters New Growth Phase

The FPS market rebounded strongly in 2Q 2026 compared with 1Q, recording six major EPC awards valued at approximately US$11.4 billion. These projects added more than 539,000 barrels of oil equivalent per day (kboepd) of processing capacity and 4.4 million tonnes per annum (mtpa) of FLNG capacity — a technology that enables gas monetisation without the need for onshore receiving terminals, making it particularly relevant for stranded offshore gas fields — underscoring the expanding role of floating infrastructure in both oil and gas development strategies.

Key awards included Petrobras's P-81 and P-87 FPSOs, awarded to SBM Offshore under a build, operate, and transfer (BOT) model — a move that reinforces Petrobras's shift away from traditional lease-and-operate structures toward eventual asset ownership. Other notable awards comprised Delfin FLNG in the US Gulf of Mexico, Azule Energy's Greater PAJ offshore Angola, PTTEP's Kikeh replacement FPSO offshore Malaysia, and Eni's Cronos floating control unit (FCU) offshore Cyprus.

FPS EPC contracting activity is expected to strengthen further in 2H 2026, with 10 additional units forecast for sanction, representing approximately US$23.5 billion in EPC value. In July 2026, Eni sanctioned the FPS unit for its Baleine Phase 3 development offshore Ivory Coast, with Wison New Energies responsible for the EPC work scope. Separately, in offshore Indonesia, Searah — the Eni–Petronas joint venture — awarded Saipem the EPC scope for the Bahtera Haluan Lestari FPSO, to be deployed in the Kutei North Basin.

Other major FPS projects to monitor in 2H include ExxonMobil's Longtail project offshore Guyana, TotalEnergies' Venus development offshore Namibia, Bahia Blanca LNG (Argentina), Ksi Lisims FLNG (Canada), and the Yoho FLNG unit offshore Nigeria. The growing pipeline of FLNG sanctions in particular reflects operator interest in opening new gas export routes from regions with limited onshore liquefaction infrastructure.

Subsea Fundamentals Remain Strong

Subsea award activity lagged behind FPS in 1H 2026, but the underlying market remains fundamentally robust. Westwood recorded US$2.9 billion in subsea EPC awards in 2Q 2026, up 7% quarter-on-quarter and 24% year-on-year. Full-year subsea EPC award value is forecast to reach US$17 billion, supported by 283 subsea tree units, of which 123 were awarded in 1H 2026.

Demand for subsea umbilicals, risers, and flowlines (SURF) in 2026 is forecast at approximately 4,000 kilometres — a 32% year-on-year increase — while export line demand is estimated at 2,600 kilometres, representing a 47% year-on-year rise.

The softer 1H award profile appears to be timing-related rather than indicative of weakening demand. Several recently sanctioned developments, including Eni's Baleine Phase 3, Cronos, and Geng North, have yet to award major subsea packages, supporting expectations of a stronger 2H 2026 and reinforcing confidence in subsea supply chain utilisation.

Offshore Momentum Broadens

Despite geopolitical headwinds delaying selected Middle East awards, the 2026 offshore market is demonstrating greater depth and resilience, supported by increased long-lead item expenditure, a wider pool of investing operators, and growing commitment to capital-intensive FLNG and deepwater projects. Market growth is becoming less regionally concentrated and increasingly driven by facility-led developments, particularly floating production systems. Subsea activity remains underpinned by a healthy sanctioned project pipeline, positioning the sector for accelerated contract awards through the second half of the year.

Source: Westwood Global Energy Group