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GLOBAL OFFSHORE MARKET FORECAST

An illustration of the Johan

S verdrup ? eld’s subsea layout.

Image from Statoil.

in 2017, expenditure in the subsea segment is expected to grow from 2018 reaching $52 billion in 2020, a compounded annual growth rate of 11% from 2017-2020. This is a growth slightly less than the previ- ous growth cycle from 2010-2014 of 12%, and far behind the 25% growth experienced leading up to the ? nancial crisis in 2008.

Figure 2 also illustrates how the different subsea segments are affected differently by the current oversupply has impacted offshore investments for downturn. The subsea services segment, which is primarily the remainder of the market. The short-term activity has subsea inspection, repair and maintenance, is a more stable been signi? cantly reduced as operators have pushed the segment driven by operational expenditure. The SURF (sub- brakes and cut back on investments in order to improve cash sea installation, umbilical, riser and ? owline) and subsea ? ows in the low oil price environment. However, the cost equipment segment (production systems like Xmas trees compression in the industry is improving the pro? tability and manifolds), which are primarily driven by investments of subsea projects. Figure 2 shows historical and forecasted in green? eld developments, ? uctuate more and are affected subsea expenditure (capex and opex) split by market seg- harder by the downturn and project postponements.

ment. The market has contracted approximately 10% in The current market downturn is forecasted to be both 2015 compared to 2014 levels of $45 billion. The negative deeper and longer than the downturn experienced during trend is forecasted to continue in 2016 and stabilize in 2017. the ? nancial crisis. The reason for this is that while the

However, with a tightening of the market balance foreseen ? nancial crisis was a demand driven downturn, the current

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