Subsea Hardware Spending to Double to $124 Billion

MarineLink.com
Tuesday, April 23, 2013

Douglas-Westwood (DW) forecast subsea hardware spending is set to double to $124 billion during 2013-2017 compared to the preceding five-year period. The new third edition of Douglas-Westwood’s Subsea Hardware Market Forecast has launched analyses the market through to 2017, examining the key activity trends to provide detailed insight for major players and new entrants alike.


 
“The prospects for the subsea hardware sector look good, however, players will face significant challenges over the forecast period,” said report lead author Angela MacCormack, an example is Brazil which accounts for 14% of our forecast subsea Capex. Project execution is a major issue for Petrobras with 70% local content requirements and engineer shortages placing pressure on the supply chain, inflating costs and delaying delivery of production systems (predominantly FPSOs). Such delays could impact the timing of subsea hardware installations and spend profiles.


 
“Our outlook takes a conservative view of stated future prospects, with some 60% additional slated projects that we have removed from our forecast. Given capacity constraints evident in the industry, we believe that this approach provides a realistic appraisal of future prospects.”


 
“Consensus is that oil prices will not grow at the same rate as the last cycle or will, in fact, fall slightly from current levels,” commented DW director Steve Robertson. “Whilst we believe that oil supply constraints will support the price in the long term, it should be recognised that the free cash flow of E&P operators will be steady or trending downward, given that most are also seeing flat or declining production levels. The E&P companies will, therefore, not be positioned to absorb cost increases and indications from our oil company clients suggest that they are already putting pressure on the supply chain to control costs and increase efficiency. However, most of our forecast subsea field developments are viable at $60 to $80 oil prices and we believe that fundamentals strongly support long-term oil prices significantly above these levels.
 


The report notes that reducing conventional opportunities, high oil prices and more advanced subsea hardware solutions are resulting in fields being increasingly developed in deeper waters, in remote locations and in more extreme metocean conditions. In addition, the offshore industry is being challenged to recover smaller, more widely scattered reserves. The growing use of subsea processing technology, such as subsea separation, multi-phase pumping and gas compression, as an alternative to the use of fixed processing platforms will also tend to provide upside potential. Moves in the industry, particularly from operator BP, to develop 20,000 PSI technology could unlock fields that are currently inaccessible with existing hardware.


 
“Subsea developments will continue to account for an ever-increasing share of global offshore activity. The technologies deployed are unlocking reserves that would previously have been difficult or impossible to access and our study shows the sector has become a very sizable opportunity for the oilfield service and equipment industry. The outlook for the subsea hardware market shows long-term growth potential, particularly in Africa, Asia-Pacific and Brazil and in addition new markets are developing in the Eastern Mediterranean and East Africa,” said MacCormack.

 

Maritime Reporter March 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Matson Declares Q2 2014 Dividend

Leading US carriers in the Pacific, Matson, Inc., apprises it has declared a second quarter 2014 dividend of $0.16 per common share. "Today's authorization continues

Cold War Revival? British Military on Guard

UK's Ministry of Defence says that warship HMS Dragon & an RAF Typhoon aircraft have been in contact with their Russian counterparts this week, as follows: The

Oceanteam Financial Transformation Aids 2013 Business

Diversified offshore shipping company Oceanteam's CEO, Haico Halbesma, writes in the Annual Report 2013 that it was a year of consolidation and operational focus for Oceanteam Shipping ASA.

Energy

At Hamburg port E-mobility Project, BESIC enters crucial phase

Ten battery-operated heavy goods vehicles now transport containers between ships and the yard at the highly automated handling facility in the HHLA Container Terminal Altenwerder (CTA).

ExxonMobil Donates $13.4 Million to 'United Way of Greater Houston'

ExxonMobil employees and retirees raised a record $13.41 million for the United Way of Greater Houston during its 2013 community campaign, which was the largest

Ukraine Forces Kill Five Rebels

Ukrainian forces killed up to five pro-Moscow rebels on Thursday as they closed in on the separatists' military stronghold in the east, and Russia launched army drills near the border in response,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Simulators
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1640 sec (6 req/sec)