Page 24: of Marine Technology Magazine (June 2015)

Subsea Hardware (Photo: Denny Cornelissen)

Subsea

Infrastructure

Growth

Tempered by

Oil Price Collapse

By Ben Wilby, Douglas-Westwood espite growth in total Capex, the outlook for subsea market share rather than oil prices by not restricting output has hardware is signi? cantly less positive than it was pre- piled further misery on prices.

Dviously. This is due to the major decline in oil price This will have a major impact, limiting the number of new which has seen the price of a barrel go from a peak of $111bbl projects sanctioned and reducing the expected year-on-year in June 2014 to below $50 in January 2015, recovering to growth till 2018 when Capex declines. The impact of the oil around $60 in April 2015. price decline on projects already sanctioned will be limited,

The high oil price over the last few years was driven by de- as in most cases the Capex has already been assigned and at mand, particularly from China. In recent months, however, de- this point operators are extremely unlikely to stop work on a cline in demand from regions such as Asia, Europe and North development. Another reason that Capex will not decline too

America has led to supply overweighing demand, resulting in signi? cantly is that some projects, such as ENI’s OCTP, have falling oil prices. The other major factor is the surge of U.S. been ordered despite the low oil price. It is also important to shale oil production, while the decision of OPEC to defend its note that many project will be deferred, not cancelled, and

June 2015

MTR 24

MTR #5 (18-33).indd 24 MTR #5 (18-33).indd 24 6/11/2015 9:56:50 AM6/11/2015 9:56:50 AM