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U.K. subsea development costs halved

Oct. 14, 1996

The average cost of U.K. subsea developments, excluding drilling, pipeline, and flowline costs, is now £ 2.5 million/wellhead, less than half the cost in 1987. So says Smith Rea Energy Analysts Ltd., Canterbury, U.K., attributing the unit cost fall to an increasing number of subsea developments each year, coupled with maturing and standardization of technology. Smith Rea reports that the subsea engineering and construction market is focused on Northwest Europe, which accounts for 38% of

The average cost of U.K. subsea developments, excluding drilling, pipeline, and flowline costs, is now £ 2.5 million/wellhead, less than half the cost in 1987.

So says Smith Rea Energy Analysts Ltd., Canterbury, U.K., attributing the unit cost fall to an increasing number of subsea developments each year, coupled with maturing and standardization of technology.

Smith Rea reports that the subsea engineering and construction market is focused on Northwest Europe, which accounts for 38% of subsea wells in production to date.

Brazilian offshore developments account for 28% of subsea well installations to date, while Gulf of Mexico projects account for 10%.

Dramatic growth in the number of subsea installations is expected the next 5 years, associated with the growing use of floating production units for offshore field developments.

Smith Rea concluded, "The current world installation rate of around 230 subsea completions/year, worth more than £ 575 million ($860 million)-excluding drilling and pipelines and flowline costs-is likely to rise to more than 300/year by 2000, worth more than £ 750 million/year ($1.1 billion/ year)."