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GLOBAL DEEPWATER REVIEWGLOBAL DEEPWATER REVIEW

Short-term

In? eld Systems’ Catarina Podevyn uncertainties takes a look at recent oil price movements and market conditions on the deepwater (500m+) capex spending up to 2019. in the deep n? eld System’s latest deepwater forecast continues to high- light the increasing uncertainty within this market segment.

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Even before the oil price decline, the landscape of deepwater investment was showing initial signs of a shift as some opera- tors looked to reassess investment decisions on economically challenging prospects; as seen on Chevron’s Rosebank develop- ment offshore West Shetland. Over 2H 2014, with a declining oil price, several capital intensive deepwater prospects were subject to reconsideration, while geopolitical conditions, particularly within the Middle East and Eastern Europe have also affected project timescales and brought additional cancellations.

Latin America

Over the 2015-2019 period Latin America, driven by Petrobras’ pre-salt developments offshore Brazil, is expected to retain its leading share of the deepwater market accounting for 35% of global deepwater capex demand. Key projects are expected to include Iara Horst, at a water depth of 2230m, and the multi- phase Buzios development.

Despite remaining the key region for deepwater investment, expenditure growth is anticipated to be at a far slower rate than during the historical period; at a CAGR of 6.3% compared to 21.2% seen between 2010 and 2014, while with Petrobras’ pres- ent ? nancial dif? culties, the rate of expenditure growth over the forthcoming period may see a further revision.

Increasing industry attention is also being drawn towards

Mexico’s deepwater prospects following energy reforms within the country. In? eld Systems expects the Lakach project to be the key development taking place over the period, with October 2014 seeing Pemex award a US$290 million subsea production systems contract to OneSubsea. However, once again the full success of developing Mexico’s deepwater prospects will be subject to a more stable investment environment.

Africa

The deepwater market is anticipated to remain strong offshore

Africa over the medium-term as a result of a small number of giant projects already underway. Spend is expected to be driven by Angola; forming a 43% capex share of the region’s deepwa- ter market. In? eld Systems forecasts a drop-off in expenditure

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