Post-Covid rebound
Report author and Rystad Energy analyst Sanwari Mahajan says the subsea market has rebounded robustly from the impacts of Covid-19, which caused a significant 20% drop in expenditure in 2020. By 2021, the industry had begun to recover, with spending increasing by 5% to reach US$23Bn.
Looking ahead, Rystad anticipates steady growth in the subsea sector, fuelled by advancements in deepwater exploration and CCS.
Deepwater developments are set to dominate the sector, accounting for 45% of the market from 2024 to 2028. Significant greenfield projects include Barracuda Revitalization in Brazil, Johan Castberg and Breidablikk in Norway and Golfinho in Mozambique. Key brownfield initiatives include Balder Future, Gullfaks South and Schiehallion in Norway and the UK.
Ultra-deepwater projects, driven by major floating production, storage and offloading initiatives in Brazil and Guyana, are projected to capture 35% of the market. South America is expected to lead globally with 500 subsea tree installations over the next five years. Upcoming ultra-deepwater greenfield projects beyond 1,500 m include Yellowtail, Tilapia and Redtail in Guyana, alongside Buzios VIII, Buzios IX, Sepia and Atapu in Brazil. Notable brownfield projects are Trion in Mexico, Egina in Nigeria, and Argos (Mad Dog Phase 2) in the US.
The subsea sector has made notable strides since 2022 amid more sanctioning activity for deepwater and ultra-deepwater developments. In that year alone, deepwater projects saw expenditures of US$12Bn, with Europe contributing 28.0% of this total. Between 2020 and 2023, Norway led globally by installing 200 subsea trees out of a total of 600 placed in deep water ranging from 125 to 1,500 m. During the same period, Norway also installed 1,400 km of SURF in deep water, surpassing Brazil’s 1,200 km.
In 2024, ExxonMobil’s expanded operations are expected to significantly boost subsea tree installations. Following Equinor, which installed 17% of the total subsea trees this year, ExxonMobil is projected to contribute 12%, with a primary focus on Guyana. This increase is driven by major projects such as Yellowtail, Redtail and Payara, underscoring Guyana’s growing prominence in the subsea sector amid heightened sanctions and a shift towards more sustainable and efficient operations.
In the SURF sector, global installations are anticipated to reach 3,500 km in 2024. Brazil is expected to account for 22% of this total, while the US and Angola are projected to contribute 15% and 10%, respectively. The installation rate is anticipated to grow at a CAGR of 15% from 2024 to 2028, with Brazil, Norway, the US, the UK and Angola being the major markets.
Looking ahead to the suppliers and operators poised to shape the market in the coming years, TechnipFMC is expected to supply around 400 subsea trees between 2024 and 2029. Of this total, 35% is estimated for ExxonMobil’s developments in Guyana and 22% for Petrobras in Brazil. Simultaneously, OneSubsea is anticipated to supply close to 270 trees within the same period, with around 40% projected for Brazil. Aker Solutions (now OneSubsea) is expected to supply 150 trees, with 80% earmarked for Norway.
Petrobras remains a dominant operator, particularly in South America, where it has heavily invested in pre-salt developments. In Europe, Equinor and Aker BP are notable for their extensive subsea portfolios, with significant tieback projects on the Norwegian Continental Shelf underscoring their strategic importance. In the US, Shell and BP lead with substantial investments in deepwater and ultra-deepwater exploration and production. TotalEnergies holds a strong position in Africa, especially in Angola and Nigeria.
*Editor’s note: this report first appeared on Rystad Energy’s website. It has been lightly edited for style and clarity.
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Publish date : 2024-08-13 03:19:00
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