Subsea Market Report To 2016

Infield Systems has just released its latest edition of the Global Perspectives Subsea Market Report To 2016. The eighth edition of this ground breaking report is devoted to the global subsea market and provides a comprehensive analysis of its many facets. Information is presented in such a way as to highlight the differing market dynamics, the changing investment opportunities, the emergence and implementation of new technology and the dominance of different companies and manufacturers in each regional market.

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As operators face the dual challenge of sustaining their production levels in mature regions and effectively exploiting the uncapped reserves in growth areas, such as, West Africa, US Gulf of Mexico and Brazil, the potential for subsea capital expenditure throughout the forecast period has increased dramatically.

In order to leverage against declining production, Operators are being forced to venture into remote and harsher locations. These projects require top tier equipment that can cost significantly more than the standard equivalent. Infield Systems estimate that ultra-deep installations will account for almost 25% of the annual tree market by 2016. Important developments include the pilot projects in the Iara and Sapinhoa fields and a series of EWTs in Sapinhoa, Libra, Iara, Franco and Iguazu fields

Prospects for manufacturers are also looking positive. The market outlook shows a well-supplied market with a total capacity of 690 trees. Towards the end of the forecast period, Infield Systems expects higher utilisation rates and the start of a saturated market, driven mostly by the increasing demand for subsea trees in main phases in Brazil and West Africa. Global subsea tree manufacturers' utilisation rates are expected to increase to an average of 75% in the next 3 years, up from 49% in the 2009-2011 period.

Advances in technology are increasingly being tested and deployed in response to the offshore industry's demand for solutions to challenges, such as: deeper and harsher waters, sustaining production rates in mature developments, boosting flow rates in low pressure reservoirs, accommodating a larger number of fields tied back to host facilities and ensuring the energy and cost efficiency of a project. Possible projects that could benefit from the use of advanced seabed technologies include: the mature fields of the North Sea and the US GoM, where a large number of small developments are expected to be tied back to existing platforms in order to be commercially viable. Infield Systems also expects that West Africa will be one of the key regions for implementing subsea processing because of its already extensive deepwater production, significant oil reserves and most importantly the geographical distribution of its fields that require multiple wells being tied-back to one central processing facility.

In Africa, oil companies such as Total, BP, ExxonMobil, Chevron and Eni will try to take advantage of the area's ample resources to leverage against the declining reserves from other mature areas. Total is leading the subsea bill with a projected US$8 billion of expenditure within the forecast period.

Asia is also becoming an increasingly important part of the world for the global oil and gas market as it is the fastest growing region in terms of energy demand, and the hub of the global LNG sector. The unfortunate events of 2011 in Fukushima, Japan, have also served to increase the region's dependency on natural gas.

Australia is emerging as a major player in the global natural gas market due to the development of offshore natural gas and (onshore) coal bed methane (CBM) projects. Post 2013, a significant backlog of major projects is predicted to provide a boost to the market. More than 50% of the forecast subsea market is expected to relate to subsea tiebacks to a fixed, a floating or a terminal facility.

The European energy market is one of the largest in the world yet it is also a region facing oil and gas production decline. The declining production in this mature region dictates the need for additional expenditure on infrastructure, EOR technologies and exploration campaigns in order to sustain or enhance existing levels.

Latin America, particularly Brazil, has the potential to emerge as a major offshore energy frontier in the global oil market. Petrobras has begun to reveal reserve estimates for its pre-salt finds that stand to significantly increase Brazil's total estimated level of reserves. 38% of the projected subsea Capex will be needed to develop the pre-salt projects.

Finally, the North American market finds itself in a challenging period; global recession followed by the Deep-water Horizon disaster, the last two years have seen a change in the regulatory environment governing operator activities across the region. Any future subsea equipment and infrastructure will need to comply with these regulations and have higher safety specifications, something that will lead to greater capital expenditure per development. In addition, the rise of the local Shale Gas market threatens to mix up the offshore market dynamics by diverting the operators' attention onshore.

Report Contents

• Executive Summary provides an overview of the Subsea market highlighting the main points of the report and identifying the most important subsea regions and operators and presenting the largest subsea tree manufacturers in terms of market share.
• Global Market Overview reviews the drivers behind the global offshore oil and gas business, including current oil market supply and demand fundamentals, oil price trends, and the growth of deepwater production and its impact on the global oil market. It also provides a comprehensive analysis of geopolitical turmoil in the Middle East and North Africa and its impact on the supply and price of oil.
• General Trends & Analysis provides a more in-depth analysis of the main subsea participants: oil companies and subsea tree manufacturers. With regard to oil companies, this section analyses where Infield Systems expects each operator to invest and provides specific details on companies' major future projects. In addition, an analysis of subsea equipment manufacturers' client portfolios is provided along with a presentation of their current subsea frame agreements. Finally, a discussion on the current subsea processing developments is provided.
• Regional Analysis & Forecast contains a detailed analysis and forecast for each of the following regions: Africa, Latin and North America, Europe, Asia, Australasia and the Middle East and Caspian. For each region subsea capital expenditure for the forecast period 2007-16 is presented together with the number of subsea equipment installations. In addition, investment figures are broken down to development drilling and subsea equipment costs and the five projects requiring the greatest amount of capital expenditure are highlighted. Finally, information on the most significant regional operators is provided.
• Component Analysis & Forecasts contains detailed analysis and forecast of each of the main sectors in the subsea market: development drilling and subsea equipment expenditure. In addition, various types of subsea equipment such as subsea trees and manifolds are presented in more detail. On a closing note, all key changes in the cost methodology are discussed together with any significant forecast changes with regard to specific projects, industry shocks such as the Macondo oil spill and macroeconomic and political issues.

Why You Should Buy This Report

• The report contains data developed by Infield Systems' market modelling process, OFFPEX, which is based on a unique "bottom up approach" to forecasting. OFFPEX's component by component and project by project forecasting process is robust and has a proven track record.
• The report presents information on the expected capital expenditure and level of subsea equipment installations by all the major subsea regions and the related countries, the different oil companies, the major manufacturers, the different types of investment and the different types of equipment.
• The report provides an independent and comprehensive analysis of the issues, new technological developments and risks impacting the Subsea market today, and how these will affect future developments over the next five years.

Online Access To Subsea Online (Essentials)

Purchasers of the Global Perspectives Subsea Market Report receive 12 months access to a database of major subsea projects (fields being developed with four or more subsea wells) being planned or considered for development in the current year and four years forward, worldwide. Subsea Online (Essentials) is continually updated with the following information provided about each project;

• Field Operator
• Project Name
• Development Type
• Date / Year On Stream
• Date / Year Discovered
• Numbers of Subsea Wells
• High Temperature / High Pressure
• Reserves
• Field Production Rates
• Location
• Development Type
• Water Depths
• Project Status
• Depletion Date /Year
  

Subsea Online Service Overview

• A three user single site licence for a period of 12 months
• Access to the latest published data set
• Unlimited access to the data through InfieldLive
• Ability to download the complete data sets to MS Excel, MS Access etc. or to interrogate the information online and export results
• Support, assistance and advice on getting the most from your subscription

Subsea Online Upgrades

The Subsea Online (Essentials) access can be upgraded to Subsea Online (Standard) or Subsea Online (Professional) or to include other field types or data sets from the Infield Offshore Energy Database.

Subsea Online (Standard) identifies all fields which are going to be developed with one or more subsea wells in the current year and four years forward, worldwide.

Subsea Online (Professional) identifies all fields, operational and future, which have been, or are going to be, developed with one or more subsea completions.

Subsea Online (Standard) and (Professional) list the same data set as the Essentials edition, however, additional tables are provided that include the following information:

• Tree Manufacturer (if known)
• Wells On Stream Prior To 2005
• Wells On Stream Annually 2005 to 2016
• Wells On Stream after 2016

A third data set is provided that shows the total numbers of trees starting up annually from 1960 through to 2027 split by: Tree Manufacturer, Country of Supply and Year of Start Up.

These two additional data sets are customised, therefore, can only be downloaded from InfieldLive and the user is not able to run online searches using the InfieldLive search engine.

For more information about the Global and Regional Perspectives series of reports, please either visit Infield.com or contact me.

Quentin D'A Whitfield
Director | Infield Systems Limited
Telephone: +44 20 7423 5001 (direct) | +44 20 7423 5000 (s/board) | +44 7768 570 850 (cell)
Email: quentin.whitfield@infield.com | Website: http://www.infield.com