Infield sees strong subsea market through 2017

The future is promising for the subsea oil and gas market in Infield Systems just released “Global Perspectives Subsea Market Report To 2017”.

Offshore staff

LONDON – The future is promising for the subsea oil and gas market in Infield Systems just released “Global Perspectives Subsea Market Report To 2017”. High oil prices, new technology, and the push to offset declining production from mature, shallow-water basins is driving operations into deepwater and ultra-deepwater, and that increases the number of subsea developments.

Following are conclusions from the report:

Ultra-deepwater developments are expected to capture 48% of capex and 23% of tree installations in 2013-2017, in contrast to 37% of capex and 15% of installations in 2008-2012, says the report. This comes as operators are cost-effectively targeting reservoirs over a wider area, and are tying back subsea wells both to fixed platforms in shallow waters and to floating infrastructure in deeper waters.

Latin America and West Africa will account for more than half of the subsea capex expected to be spent between 2013 and 2017.

This is driven by large deepwater and ultra-deepwater discoveries offshore Brazil, particularly in the presalt basins, and offshore Angola and the Gulf of Guinea. Petrobras dominates the subsea sector and is expected to account for 24% of global subsea capex in the next five years to further key projects such as Papa Terra, Lula, and Franco. However, the fast pace of development anticipated by the Brazilian government depends on Petrobras' ability to overcome capacity constraints and control costs.

The highest investment levels and number of installations of subsea trees in Africa are expected to occur in 2017 driven by large developments such as the Kaombo and Cabaca fields in Angola, and the Bonga Southwest and Nsiko projects in Nigeria, depending upon how Nigeria moves to secure investor confidence.

Norway and the UK show high drilling activity on producing fields and the completion of subsea tiebacks on smaller, remote accumulations mostly in shallow waters. In the North Sea, this is an effort to reverse declining production. Despite a decrease in global capex market share due to less capital intensive shallow water activity relative to other regions, Europe is expected to attract an increasing share of subsea tree installations.

In the USA, the shift from shallow water developments towards large oil and gas discoveries further offshore is well under way. The deepwater Gulf of Mexico is expected to host many new floating platform developments, combined with the tieback of subsea satellite fields later on in the forecast period.

Asia, Australasia and the Middle East are emerging opportunities for the subsea market. These three regions will together increase their market share from 8% in the last five years, to 15% in the next five years. Operations in Asia are moving exploration and production into deeper waters. Malaysia, Indonesia, India, and China are becoming major subsea industry hot spots attracting a range of operators from NOCs, CNOOC and ONGC, to IOCs Shell and Chevron, and independent international companies like Murphy and Husky.

Australasia's subsea sector is driven by its fast-growing LNG export industry, which is racing to meet rising demand for natural gas in Asia. Fields are being tied back to large onshore LNG producing facilities.

Large gas discoveries in the last five years in the eastern Mediterranean are driving subsea investments in the Middle East. The start-up of the deepwater Tamar field in April 2013 offshore Israel is expected to be only the start of increased subsea activity in the Levant basin, where Noble Energy is a major player.


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