Re-engineered and integrated solutions to drive subsea activities – However, pricing pressure remains
Westwood Energy’s Subsea Vessels Operations and Hardware Market Forecast Q2 data output forecasts subsea vessels operations and hardware expenditure to total $149.4bn over the 2018-2022 period. Detailed analysis indicates subsea orders over the 2018-2019 period will outstrip the previous 36 months, however, pricing is set to remain competitive
Global Subsea Vessel Operations & Hardware Expenditure 2013-2022
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- Over the forecast period, subsea vessel day demand will increase by 9% compared to the 2013-2017 period. However, vessel operations expenditure will decline by 2% over the forecast compared to the hindcast, as pressures on vessel day rates continue.
- Subsea tree demand will grow at a 2% CAGR over the forecast period, driven by demand from Brazil, Asia and West Africa. However, subsea order backlog is still on a decline, as project sanctioning over the 2018-2019 period is expected to be 22% lower than projects sanctioned over the 2013-2014 period.
- Expenditure in Europe will total $40.9bn over the 2018-2022 period, with Norway accounting for 35% of spend in the region.
- With only a handful of large projects expected in the US GoM over the forecast period, the basin will remain attractive with over 140 subsea trees to be installed over 2018-2022. This will be driven by various fast track subsea projects.
- The line pipe and pipelay sector will account for 30% of forecast expenditure driven by Russian gas pipelines over the 2018-2019 period. However, other projects in South East Asia and the Middle East will support spend in the latter years of the forecast period.
- Subsea IMR will grow at a 5% CAGR over the forecast period, accounting for 13% of expenditure. This represents a 16% growth over the 2013-2017 period.
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This update highlights the continued recovery in activity and confidence in the subsea market since the turn of the year due to a relatively stable oil price environment. This has been supported by project re-engineering coupled with improved subsea integrated offerings as a result of various M&A activities over the past 24 months. Furthermore, digitization and technological advancements in areas of field inspection and maintenance have helped streamline IMR activities due to efficiencies and speed derived from improved technology.
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