Construction and operation of offshore windfarms is expected to provide subsea companies from the oil and gas industry with an increasing amount of work, an industry analyst believes
Speaking at Subsea Expo in Aberdeen, Wood Mackenzie principal analyst, upstream Mhairidh Evans said, “The subsea market picked up significantly in 2018, after a 20-year global low for new contracts in 2016. The North Sea was a big part of that recovery, with almost 30% of new subsea wells sanctioned in 2018 and 2019 being in the UK or Norway.
“That is positive news for the local supply chain. But we still see a gap between supply and demand. Some companies’ orderbooks are filling up – but not all.”
She told delegates that as oil and gas operators continue to rein in spending, Wood Mackenzie expects 2020 to be flat. “That means we may yet see more consolidation in the supply chain,” she added.
“When we look ahead to the next few years for subsea, what happens next is less certain. Companies cannot bank on a new oil and gas upcycle coming along and references to past levels of activity and spend are no longer relevant,” Ms Evans said.
“The future of offshore will be shaped by brand new forces such as digitalisation and decarbonisation. The most successful companies will be those who rip up the reference book and adapt to change quickly. The oil and gas market remains by far the largest sector for the subsea supply chain today, but offshore wind is starting a big growth trajectory.
“We forecast substantial investment in offshore wind, more than doubling between now and 2025 to reach US$49.2Bn per year and much of that investment will be in Europe. There are opportunities all across the subsea supply chain in offshore wind, and it is turning the heads of many of the industry’s biggest players.”