Market Research Report
World Subsea Hardware Market Forecast 2016-2020
|Published by||Douglas-Westwood||Product code||303589|
|Published||Content info||59 Pages
Delivery time: 1-2 business days
Douglas-Westwood (DW) expects subsea hardware Capex to total $94.3 billion (bn) over 2016-2020. This represents a 19% decline compared with the preceding five-year period. Capex and subsea tree installations are not expected to return to 2014 record levels during the forecast period. This is due to a sustained decline in the number of subsea tree orders, following record order levels in 2013. Historically high backlog levels have cushioned the market against the decline in order activity. However, DW does not expect this to be sufficient to counteract a further decline in orders in the near-term, exposing OEMs (original equipment manufacturers) to the impact of the oil price downturn.
Despite these near-term concerns, the long-term fundamentals of the subsea hardware industry are strong as they continue to benefit from continued increase in hydrocarbon demand, declining onshore and shallow water reserves and technological improvements. Despite concerns over deepwater project economics, subsea expenditure continues to trend towards deeper water, which accounts for 48% of total expenditure over the forecast period - an 8% increase compared with the hindcast. This growth is supported by projects in water depths greater than 1,000metres. Over the next five years, development activity in the established deepwater provinces, coupled with the start of field development in frontier areas such as East Africa, will support expenditure.
Overall, subsea hardware expenditure will be highest in Africa, Asia and Latin America, which will account for a combined 47% of total Capex over the forecast period. The largest proportion of expenditure will be attributed to pipelines (41%), whilst subsea production and SURF will account for 33% and 26% respectively. Pipeline kilometres to be installed over the 2016-2020 period will remain relatively high. This market is heavily dependent on a handful of major projects, and as a result, the cancellation or stalling of any of these projects will have a negative impact on the market size over the forecast period.
Over the forecast period, subsea hardware Capex will be constrained as the prolonged low oil price hits numerous projects on a global scale. This will have a negative impact for both operators and subsea manufacturers, as the impact of delayed projects is likely to last long into the forecast period even as oil prices start a slow recovery. However, some projects are expected to be sanctioned once development concept has been redefined and equipment costs lessen.
The World Subsea Hardware Market Forecast 2016-2020 details specific subsea hardware trends by region and component supported by analysis, insight and industry consultation, and includes:
DW's market forecasting is trusted by sector players worldwide, with clients including the world's top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms.
The report is relevant for financial institutions, equipment manufacturers, offshore construction companies, drilling operators, oilfield services companies and oil & gas companies wanting to better understand where and when to make investment decisions.
Our proven approach includes: