Operators advancing offshore FEED during downturn
Backlogs for subsea equipment manufacturers are being rapidly eroded as new orders dwindle, says analyst Douglas-Westwood.
This will lead to a likely trough in installations during 2017-2018.
But as with previous down-cycles, operators are continuing to progress development concepts and initial engineering on stalled projects, DW claims, notably inAustralia, where Hess is proceeding with the tender process for engineering, procurement, and construction (EPC) contracts for a giant semisubmersible platform and other subsea equipment for its Equus field development project.
This is despite the fact that the project is unlikely to be sanctioned before 2017.
In theUS Gulf of Mexico, BP is in the process of tendering for EPC contracts for its Mad Dog Phase 2 project, even though the final investment decision remains uncertain. In addition, pre-FEED exploration and appraisal drilling is under way for Anadarko’s Shenandoah field, even though project sanctioning has been delayed.
Lead-times for delivery and prices typically increase as activity picks up. Being “first in the queue” as a result of continuing FEED work through the down-cycle, DW adds, may be critical for operators seeking to maximize value from future field developments.
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