The global subsea oil and gas market will remain strong for the foreseeable future and is forecast to total $218 billion over 2008-12, reports Scottish Enterprise in a study to be released shortly. This is despite a market growth of nearly 90% during the past 5 years.
“The Subsea Market Report 2008-2012,” is one of a series of reports commissioned by Scottish Enterprise’s Energy Team from energy business analyst firm Douglas-Westwood.
“We expect that increasing global energy demand coupled with high oil price and the move to deeper waters will drive subsea activity to new levels in the years ahead,” said lead study analyst Thom Payne from Douglas-Westwood’s Aberdeen office. “Key regions within the market are Africa, Latin America, North America, and the North Sea. Together these regions accounted for over 70% of the global subsea market in 2007.
“Further discoveries and developments in Brazilian deepwater plays will continue to drive growth in the Latin American market” over 2008-12, Payne said. “Currently we expect that the vast majority of Latin American spend will be focused in this area, but uncertainties over future developments in Mexico, such as Ku Mallob Zaap field, could result in increased spend in this area over the forecast period.”
Payne said the African subsea market is growing at a faster rate than all other regions, with expenditures expected to increase by 16% during 2008-12 “when spend will equal just over $11 billion.” Other major growth markets will be Latin American and Asia.
“The Asian subsea market was valued at $4.2 billion in 2007, and we expect it to exceed $6 billion in 2012,” driven by rising energy demand, Payne said.
The subsea market of regions such as the Middle East and Russia will be characterized primarily by export and trunk lines linking them with consumer markets in Asia and Europe. “We expect that these developments will result in the ‘rest of the world’ accounting for 14% of the 2008-12 market,” Payne said. After 2012, he expects important development in the Russian Arctic and South Pars field off Iran to drive subsea spend in those regions.
“The only thing that is stopping the market [from] growing at a faster rate is a global shortage of resources ranging from deepwater drilling rigs to experienced engineers,” Payne said.