The New Reality

We expect offshore E&P spending to decline 15% in 2017. As oil companies have made progress in resolving cash overspending, we see the potential for flattish offshore spending in 2018 if oil prices stabilise in the mid-50s USD/bbl, but further downside at USD50. At the same time, we see offshore – in particular deepwater – continuing to lose capital allocation to US onshore, and oil companies remaining focused on dividends and deleveraging. YTD, oil service stocks are down 31% on average, an...