Deepwater is the natural hunting ground of the big beasts. It is capital-hungry to a degree that would make lesser firms faint; technologically, it’s as unforgiving as the abyss it operates in; and it demands project management capabilities of almost imperial discipline over time horizons so long they might as well be dynastic. These ventures unfold far from shore—mercifully distant from the regulatory theatrics and bureaucratic clown shows that plague onshore development in many jurisdictions. It’s precisely this isolation that the majors adore: distance from land means distance from political insanity.
But deepwater also has a cruel mistress—markets. It requires stable markets willing to pay a premium for oil and gas, because nothing about operating on the ocean floor is cheap. And here lies the central problem. Shale oil and gas have effectively slammed a price ceiling onto the global energy market. For the past fifteen years shale has undergone a gut-wrenching trial by fire, riddled with bankruptcies, boom-bust cycles, and hard lessons. But like any body repeatedly broken down and rebuilt, it has emerged leaner, tougher, and vastly more efficient.
Now add to this volatile brew the looming specter of the greatest global economic depression of our age—an event already well underway, whether the official narrators care to admit it or not. In such conditions, deepwater projects will have their work cut out for them.
And yet, despite the gathering storm, one can only offer a begrudging wish of good fortune. The world will need more energy in the years ahead, not less. And if anyone is capable of cracking the deepwater code under these hostile circumstances, it is the majors—those sprawling, risk-tempered leviathans that thrive where others drown.