After a slight lill, global subsea activity is set for a dramatic period of activity with hardware Capex estimated to total US$117 billion between 2014 and 2018, a growth of more than 80% compared to the preceding five-year period, according to a new report from leading International oil and gas industry research group Douglas-Westwood (DW).
This follows a lower than expected level of subsea tree installations in 2013 due to delays in crucial projects off Brazil and West Africa. However, in its “World Subsea Hardware Market Forecast 2014-2018” DW predicts an increase through to 2018, with major manufacturers reporting strong backlogs.
The strong growth forecast in the next five years is due to a favourable outlook for offshore activities in the extablished deepwater provinces and the start of field development in new frontier areas, such as the Eastern Mediterranean and East Africa. Subsea hardware spend will be the highest in Africa, Latin America and North America, with the three regions combining to form almost half of the global total. Expenditure continues trending towards deeper waters with around 44% of total spend in the next five years targetting projects in water depths greater than 1,000 metres.
Subsea production equipment is to attract almost half of all expenditure by component, as high-value projects are set to come onstream after tree awards reached record levels in 2013, underpinning the elevated levels of subsea expenditure over the coming years. The SURF market makes up over a third of expenditure, driven by the development of remote fields, the addition of new project phases and the tie-back of satellite fields into subsea hubs. Pipelines make up the remaining spend, increasing considerably until 2016, driven by a few large offshore pipeline projects and several smaller tie-back pipelines. The subsea sector will again be a major focus at AOG in 2015.