Offshore MMO: Leaner supply chain to see $376bn of expenditure over next 5 years with wind opportunities emerging
The offshore MMO market has seen a turbulent few years, with operators stripping back non-essential maintenance regimes and demanding significant pricing reductions for any greenlit work. A much leaner supply chain has emerged following the downturn. While there is not expected to be much respite in these pressures from operators the O&G MMO market is expected to average 3.4% growth per annum, totalling expenditure of $376bn over the next five years.
Offshore O&G MMO Expenditure Indices by Service Line 2013-2022
As we emerge from the downturn, Westwood also expects to see strong growth for asset integrity as operators look to optimise their maintenance regimes – thereby maintaining production while keeping control of brownfield expenditure. This service line is likely to see the strongest recovery towards pre-downturn levels, despite sustained lower pricing. Meanwhile, asset services and support services, which are more labour orientated, are expected to see more measured growth profiles out to 2022. Modifications, on the other hand, saw a dramatic decline (-43%) in expenditure over 2014-2016, due to operators shelving non-essential plans. Over the forecast period, many of these delayed modifications are expected to now go ahead.
Key Conclusions
- O&G MMO market to total $376bn over 2018-2022 period, with a 3.4% CAGR.
- Offshore wind O&M presents a $28bn market opportunity.
- Global fixed and floating platform population to increase from 8,139 to 8,477.
- Asset Services to account for 58% of total MMO expenditure.
- Asset Integrity to be boosted by emphasis on ‘maintenance optimisation’.
- Modifications spend saw dramatic decline through the downturn but is expected to see a strong recovery.
- Offshore wind to see 36GW of capacity additions to 2022, overall O&M expenditure of $28bn over the same period.
