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Report predicts 80 per cent growth in subsea equipment market over the next four years

22nd May 2014

The latest Douglas-Westwood report forecasts global subsea hardware capital expenditure will total USD 117bn between 2014 and 2018

Report predicts 80 per cent growth in subsea equipment market over the next four years
Subsea hardware spend will be the highest in Africa, Latin America and North America, with the three regions combining to form almost half of the global total

This represents growth of more than 80 per cent compared with the preceding five-year period. In 2013, subsea tree installations were lower than expected with delays in crucial projects off Brazil and West Africa. However, the report predicts an increase through to 2018, with major manufacturers reporting strong backlogs.

The global financial crisis in 2009 and the Gulf of Mexico oil spill in 2010-2011 limited growth in subsea hardware spend in the 2009-2013 period. The strong growth forecast in the next five years is due to a favourable outlook for offshore activities in the established deepwater provinces and the start of field development in new frontier areas, such as the Eastern Mediterranean and East Africa.

Subsea hardware spend will be the highest in Africa, Latin America and North America, with the three regions combining to form almost half of the global total. Expenditure continues trending towards deeper waters with around 44 per cent of total spend in the next five years targeting projects in water depths greater than 1,000 metres.

Subsea production equipment is to attract almost half of all expenditure by component, as high-value projects are set to come on-stream after tree awards reached record levels in 2013, underpinning the elevated levels of subsea expenditure over the coming years. The subsea umbilicals, risers and flowlines market makes up over a third of expenditure, driven by the development of remote fields, the addition of new project phases and the tie-back of satellite fields into subsea hubs. Pipelines make up the remaining spend, increasing considerably until 2016, driven by a few large offshore pipeline projects and several smaller tie-back pipelines.

Details of the full report can be found at www.douglas-westwood.com

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