Westwood’s Global Subsea Tree Tracker

Each month, Westwood’s subsea team provides a global update on subsea tree awards, with data sourced from, and analysed using, the new SubseaLogix service. Bookmark this page for regular updates on the health of the subsea oil and gas sector.

Updated – 4th September, 2020

Norway: 3Q subsea tree order intake is forecast to be driven by EPC contract awards planned for Equnior’s  Breidlablikk and Lysing fields. First oil for both fields is currently scheduled for 2H 2023 and 2H 2021 respectively.
Brazil: Westwood forecast Petrobras will account for 25% of visible subsea tree demand over the 2021-24 period, driven by phase 4 of its pre-salt development plans. The plan comprises 12 individual subsea developments, with a total of over 180 subsea tree units, including Buzios phases 9-12, Sepia phase II and the Sururu field. 
  • Westwood anticipates a total order intake of 16 subsea trees in 3Q 2020 – a 70% decline year on year. No awards were announced in August 2020.
  • Total estimated subsea tree order intake for 2020 has been revised down to c.100 units, of which 60% have already been contracted as of September 4th 2020. Of the estimated c.40 units still anticipated in 2020, 15 are with Equinor’s Breidablikk and 19 with Equinor’s Bacalhau projects. The 2020 subsea tree order intake will fall well below 2016 levels if EPC contract awards for these fields are delayed to after year end.
  • The visible five-year subsea tree demand outlook (2020-24) is based on probable projects is forecast to total c.1040 units. This is a 5% upward revision compared to last month’s outlook. Notable additions to the five-year outlook include Woodside’s Browse (Australia), Ithaca Energy’s Captain EOR project (UK) and ENI’s Agogo full field development (Angola).

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com

Updated – 4th August, 2020

China: In June, CNOOC awarded OneSubsea the EPC contract for an integrated subsea production system on the Lufeng 22-1 redevelopment. The field will be developed with four subsea trees tied back to the Lufeng 15-1 platform. First oil is currently scheduled for 2H 2022. 
Brazil: In July, Petrobras issued a multi-package tender for the supply of 53 subsea trees for the Buzios field, with commercial bids currently scheduled to be submitted in 4Q 2020. These units will be linked to the Almirante Tamandare, P-78 and P-79 FPSOs. Westwood anticipates the contract for this multi-package tender will be awarded over the next 18 months.  
Norway: The Norwegian government has reacted to challenging market conditions by introducing tax incentives to support offshore field developments. This move could encourage more FIDs in the Norwegian Continental Shelf over the next few years.
  • Westwood anticipates a total of 18 subsea tree orders  in 3Q 2020, a 67% decline year on year. No subsea tree contract awards were announced in July 2020.
  • Total estimated subsea tree order intake for 2020 remains unchanged at c.110 units, of which 54% have already been contracted as of 4 August 2020. Of the estimated 50 awards still anticipated in 2H 2020, 30% are associated with the letter of intent (LOI) issued by Equinor for the Breidablikk development in June 2020.
  • The visible five-year subsea tree demand outlook (2020-24) based on probable and possible projects is forecast at c.983 units – a 2% upward revision compared to last month’s outlook. The recently announced Phase 4 pre-salt basin development strategy by Petrobras has led to an increase in potential subsea tree demand in the later years of the forecast.

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com

Updated – 4th July, 2020

USA: LLOG sanctioned the development of its Taggart discovery in June 2020. The field will be developed via a two-well subsea tieback to Williams operated Devils Tower Spar. The field is expected to produce an average of 10kbbl/d over 8 years, with first oil expected in 1Q 2022.
Norway: Equinor issued a letter of intent to Aker Solutions for the provision of subsea equipment to develop the Askeladd West (2 subsea trees) and Breidablikk (15 subsea trees) discoveries. Aker Solutions confirmed that the Askeladd West subsea equipment will be delivered under a 2017 frame agreement, whilst the contract award for Breidablikk is subject to field operator and partners taking final investment decision.
  • 2Q 2020 subsea tree order intake closed at 8 units (excluding letter of intent) – 3 units lower than Westwood’s projection as of 4th April.
  • Total probable subsea tree total order intake for 2020 is now estimated at c.110 units. This represents an 8% downward revision compared to Westwood’s previous projection of 120 trees  on 4th June 2020.
  • The visible five-year subsea tree demand outlook (2020-24) based on probable and possible projects is forecast at c.965 units – a 7% downward revision compared to last month’s outlook. There is potential upside to the forecast should recently shelved projects such as Woodside Petroleum’s Browse project and Total’s North Platte re-emerge if market conditions improve.

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com

Updated – 4th June, 2020

Brazil: Petrobras continues to focus its resources on pre-salt basin developments with the Mero-2 subsea production package awarded in 1Q 2020. Submission of commercial bids for the Mero-3 and Buzios subsea packages are still anticipated this year despite challenging market conditions.
Nigeria: In May, Shell indefinitely delayed the submission of commercial bids for its long-delayed Bonga SW project. The field was expected to be developed with 20 subsea trees, with peak production of 175 kboe/d.
China: A preferred bidder for CNOOC’s Lufeng 22-1 has emerged and the official contract award for the four subsea tree development is imminent. First oil is currently expected 2H 2022. 
  • No subsea tree contract awards were announced in May 2020. The probable total order intake for 2020 is now estimated at c.120 subsea trees, 6% lower than Westwood’s projected number as of 4th May 2020 (130 trees) and the lowest since 2016.
  • Subsea tree demand over 2020-24 based on probable and possible contract awards is now forecast to total approximately 1,040 units – a 10% downward revision compared to last month’s outlook.

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com

Updated – 4th May, 2020

Mozambique: ExxonMobil is working on a new plan to sanction its Mamba project in 2021. ExxonMobil stalled the EPC contract award that was planned for 2020, stating the need to optimise its development plans and explore opportunities related to the current market environment.
Australia: In April, Woodside Petroleum awarded TechnipFMC the iEPCI contract for Greater Western Flank Phase III project. The project consists of 4 subsea wells and a production manifold tied back to existing infrastructure.
USA: Shell has delayed the sanctioning of its Whale project in the US GoM until 2021 which was initially planned to reach FID in the first half of this year. Shell has cited supply chain constraints and uncertain economic conditions as the reason for the delay.
  • Total order intake for 2020 is now expected to end at c.130 subsea trees,  31% lower than Westwood’s projected number as of 3rd April 2020 (190 trees).  As the COVID-19 pandemic continues to constrict the global energy market, E&Ps continue to exercise caution over sanctioning new developments in the near-term.
  • As E&Ps continued to announce a wave of project delays and cancellation in April, Westwood’s visible five-year subsea tree demand (2020-24) based on probable and possible contract awards is now forecast to total approximately 1,120 units – a 3% downward revision compared to last month’s outlook.
  • Projects to watch in Q2 are Petrobras’ Mero 2 and Marlim revitalisation. However, continued uncertainty in the market means contract awards could be delayed until later in the year.

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com

Updated – 3rd April, 2020

Westwood_Subsea_Tree_Tracker_1Q2020 03_02_20
Senegal – Woodside Petroleum and its field partners reached FID for the Sangomar field in January 2020. An alliance between Subsea 7 and OneSubsea will deliver the integrated subsea solution, with the offshore campaign expected to take place from 2021 to 2023.
2Q 2020 subsea tree orders are expected to total 22 units. However, the timing of official contract awards could be impacted by the COVID-19 pandemic.
Angola – TechnipFMC were awarded the subsea iEPCI contract for the Platina field in Block 18 after BP reached final investment decision for the development late 2019.
  • The oil price crash & COVID-19 pandemic has sent subsea tree demand in 2020 into a tailspin, as E&Ps continue to announce capex cuts and project deferrals/cancellations.
  • 1Q 2020 subsea tree order intake closed at 34 units – 22 units lower than Westwood’s projection as of 3rd of March. This is due to the continuous delays to the official contract award for Petrobras’ Mero II and the Marlim revitalisation projects in the Santos Basin off Brazil.
  • Overall, Westwood’s revised 2020  subsea tree order intake is forecast at c.190 units  (including units already ordered in 1Q 2020). This represents a 42% downward revision compared to last month’s projection but still more than double the recorded figure for 2016.
  • The visible five-year order outlook (2020-24) is now forecast to total over 1,160 units – a 20% downward revision compared to last month’s outlook.

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com

Updated – 3rd March, 2020

Westwood Global Subsea Tree Tracker 04-03-20
Norway – Subsea tree order intake over the 2020-2024 period in NW Europe is impacted by Equnior’s decision to re-evaluate its Wisting development due to the high breakeven price.
1Q 2020 – Key awards QTD includes Woodside Petroleum’s Sangomar and Santos’ Van Gogh phase II infill development
Guyana – Delays in the approval of a new regulatory framework has led to the revision of subsea tree contract award timeline for ExxonMobil’s Payara development. Contract award expected in 2Q 2020
  • 1Q 2020 subsea tree order intake is expected to total 56 units – as of 3rd March. This is a significant downward revision (51%) from our 3rd Feb projections. ExxonMobil’s Payara FID pushed to 2Q. 
  • Key projects to watch in 2Q includes ENI’s Mamba, Woodside Petroleum’s Scarborough and Shell’s Whale project.
  • Total 2020 subsea tree potential order intake is still projected at over 320 units.
  • Visible Five-year potential subsea tree order outlook (2020-24) is now around 290 units a year. This is a 6% downward revision to last month’s outlook.

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com

Updated – 3rd February, 2020

Westwood Global Subsea Tree Tracker 4Q 2019
GoM: TechnipFMC and OneSubsea were awarded industry first 20K subsea trees
114 awards expected in 1Q2020 – a significant YoY and QoQ uptick. Key projects to watch include Mero, Payara and Gumusut Phase III
  • 43 tree orders in 4Q2019, down 59 units YoY and resulting in a total 2019 intake of 213 (vs 271 in 2018). 4Q2019 awards were focused in US GoM (Anchor, Shenandoah) and Russia.
  • 1Q2020 orders expected to hit 114 – as of 3 Feb, 23 units have been awarded. Total 2020 intake projected at 327.
  • Five-year order outlook (2020-24) remains unchanged averaging 310 units a year.

Mark Adeosun
Lead Analyst, Subsea
madeosun@westwoodenergy.com