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longer term growth is expected in the subsea market. marginal projects such as Kraken will continue as planned

Other issues such as the Petrobras scandal and political is- but new projects face a high risk of development plan delays at sues in a number of key regions also add uncertainty to the this time. Similarly to deepwater projects, marginal ? eld pro- ? nal years of the forecast. duction will be crucial for meeting the world’s energy needs as well as ensuring the continued development of mature ba- sins such as the North Sea. The recent U.K. tax incentives are

Drivers of Subsea Hardware Installation Activity

Despite the collapse in oil price there will be a number of an example of how these marginal ? elds can be made eco- other supply and demand side drivers that impact on subsea nomic and attractive to operators.

The subsea sector has seen rapid technological progress hardware installation activity: in recent years to ensure that hardware can withstand higher

The move to deepwater; • pressures and more expansive subsea developments. This has • Development of complimentary production technologies; enabled cost-effective production to develop – tying in addi-

Marginal and remote ? eld development;• tional wells to a single manifold, for example. These small

Fields in harsh environments.

•

It is vital that declining production from maturing basins tie-ins can be uneconomic with a low oil price and due to the is replaced. Long term demand for oil and gas is increasing speed with which they can be installed once sanctioned, a in developing regions and there is added pressure to explore number of them are likely to be delayed until an oil price rise and produce in deeper waters as a result. High oil prices have is seen. In addition, subsea processing technology is slowly maturing, enabling production from challenging reservoirs in- enabled investment in deepwater developments and technol- ogy, with previously unviable or marginal projects able to be cluding heavy oil. This is still relatively early in development developed in these Capex-intensive situations. The period of however and use of the technology will be impacted by the high oil prices has also led to exploration of ultra-deep basins lower oil price. A lot will depend on how successful the large, and the Stones FPSO will be the deepest FPSO ever installed high Capex Åsgard B compression unit is. If this proves to be when it begins production later this year. Both exploration and a worthwhile addition to the ? eld and operates without issues development will now suffer due to the collapse in oil price as it will be a lot easier for other companies to sanction them for ? elds they believe require subsea processing.

operators aim to ensure low costs and high margins are estab-

Operators are becoming increasingly interested in the devel- lished in projects before approving them. Despite this, most oil companies take a long-term view of the market and will opment of 20,000 psi hardware as ? elds with higher pressures and temperatures are developed. Trees rated at 20k psi are still only defer, not cancel, these high Capex projects.

Marginal ? elds remain a key driver but the impact of these some way from being ready for use with the ? rst likely to be ? elds will be lessened by oil price uncertainty. Sanctioned on the Kaskida–Tiber development in the Gulf of Mexico in www.marinetechnologynews.com

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