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Subsea Systems - Global Market Trajectory & Analytics

  • ID: 4806319
  • Report
  • September 2020
  • Region: Global
  • 412 pages
  • Global Industry Analysts, Inc
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Shattered by the global pandemic, the oil & gas industry is facing its worst ever crisis, an overstocked supply market and a steep decline in demand. Choking economic activity over the last few months is sending shockwaves of disruption through the industry. From prices dipping to subzero to oil producers in the first time in history having to pay to dispose excess stocks, the industry has seen the worst. In this crisis of unimagined magnitude, CAPEX spending is worst hit. As business confidence plummets rapidly, major oil companies have already slashed planned CAPEX spending by almost US$89 billion in 1st quarter 2020. Travel bans, manufacturing shutdown of all non-essential plants, closure on offices have wielded the most severe demand shock. A mistimed price war between Russia and Saudi Arabia following Russia's decision to pull out of a joint production cut agreement additionally aggravated the demand supply imbalance. China in early February during the heat of the pandemic banned entry of oil tankers while tightening the lockdown measures. OPEC talks to cut back on production failed as Russia refused to cooperate. Saudi Arabia during this period offered US$6 to US$9 discount per barrel for European, Asian, and U. S customers. As a culmination of these factors, the world witnessed negative oil prices become a shocking reality. As rising stockpiles overwhelmed storage facilities, the amount of oil stored on massive tankers on sea skyrocketed to over 160 million barrels in April 2020 as compared to the less than 100 million in April 2009 during the Great Recession. Oil consumption in April 2020 fell by 28 million barrels per day (mbd) and for the whole year 2020 the decline is estimated at 9.8 mbd.

The entire O&G value chain is feeling the pain as upstream, midstream and downstream operations collapse under a domino effect. Against this backdrop, the global market for Subsea Systems is forecast to witness severe short-to-medium term pain before reaching a revised market size of US$14.5 billion by the year 2027. As financial losses build-up for oil companies, CAPEX investments will also witness a parallel blow reducing opportunities for subsea systems that aid in processing and production of hydrocarbons from offshore wells. Currently for most oil giants worldwide higher prices are needed to breakeven. Breakeven prices for Saudi Arabia, UAE, Iraq, Azerbaijan, Kuwait, Kazakhstan, and Russia include US$85, US$65, US$64, US$51, US$49, US$42, and US$40 respectively. A Hiatus in growth is therefore seen as inevitable until capital availability recovers for Deepwater offshore drilling for hydrocarbon extraction. The virus led recession will likely delay the recovery further.

The market will nevertheless bounce back as the economic climate improves, since the goal of energy independence is an evergreen force driving countries to extract oil from the ocean depths. Continued political unrest makes reliance on conventional oil wells in the Middle East very undesirable and a growing number of oil enterprises will continue to lean towards deeper water plays as geo-political issues make Iran and Iraq etc. unpredictable environments for investors. Rise of enhanced oil recovery (EOR) technologies is another major factor that has contributed immensely to the growth of offshore exploration activities over the last decade. Since most oilfields are present 400 meters and 1,500 meters below the sea level, success of Deepwater resource extraction depends largely on innovations in subsea equipment. New generation subsea equipment will therefore play a key role in increasing the productivity, integrity and safety of subsea production processes. Subsea environment requires the use of a range of sophisticated technologies and systems that enable processing and production of hydrocarbons from offshore wells without the need for surface production activity. Major activities undertaken are down hole and seabed oil/gas/water separation, seabed and down hole multi-phase pumping, gas compression, and flow assurance. Primary benefits of using subsea systems include improved recovery of oil and gas stocks, lowered costs pertaining to surface production, reduced chances of gas hydrate formation in flow lines, increased Net Present Value (NPV), and overall higher production.

Competitors identified in this market include, among others:
  • Aker Solutions ASA
  • Baker Hughes, Inc.
  • Dril-Quip, Inc.
  • Kongsberg Gruppen ASA
  • McDermott International, Inc.
  • National Oilwell Varco
  • Oceaneering International, Inc.
  • OneSubsea
  • Parker Hannifin Corporation
  • Proserv Group Inc.
  • Saipem S. p.A.
  • Siemens AG
  • Subsea 7 S. A.
  • TechnipFMC plc.
Note: Product cover images may vary from those shown
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I. INTRODUCTION, METHODOLOGY & REPORT SCOPE

II. EXECUTIVE SUMMARY

1. MARKET OVERVIEW
  • Impact of Covid-19: A Looming Global Recession and Depressive Oil Industry Outlook for 2020
  • Massive Decline in Crude Oil Demand Pushes Oil Industry CAPEX and E&P Spending to Downward Trajectory
  • Global Daily Crude Oil Demand in Million Barrels for the Years 2015 through 2020
  • World E&P Spending (in US$ Billion) for the Years 2016 through 2021
  • Breakdown of Global E&P Spending (in %) by Supply Segment for the Year 2019 & 2020
  • Breakdown of North American E&P Capital Spending (in %) by Type of Company for 2020
  • Breakdown of CAPEX Reductions (in US$ Billion) by Type of Oil Company in 1Q 2020
  • An Introduction to Subsea Systems
  • Subsea Systems: Current Market Scenario and Outlook
  • Recent Market Activity
  • Subsea Umbilicals, Risers, and Flowlines (SURF): Largest Product Segment
  • Subsea Trees Continue to Widen Addressable Market
  • Subsea Boosting Systems Exhibit Fastest Growth
  • Sustained Demand for Subsea Separation Systems
  • Control Systems Make a Cut
  • Manifolds Remain Highly Relevant
  • Market for Injection Systems & Compression Systems Will Continue to Grow
  • COVID-19 Pandemic Set to Dent Economic Growth Across All Regions, While Inducing Weakness Into Oil & Gas Sector
  • World Economic Growth Projections (Real GDP, annual % Change) for 2019, 2020 & 2021
  • Global Purchasing Managers' Index (PMI) Points for the Years 2018 through 2020
  • Competitive Scenario: A Consolidated Marketplace
  • Global Competitor Market Shares
  • Subsea Umbilicals, Risers, Flowlines (SURF) Competitor Market Share Scenario Worldwide (in %): 2019
  • Subsea Trees (Production System Type) Global Competitor Market Share Positioning for 2019
  • Subsea Boosting Systems (Processing System Type) Global Competitor Market Share Positioning for 2019
2. FOCUS ON SELECT PLAYERS

3. MARKET TRENDS & DRIVERS
  • Favorable Long-Term Forecasts for Oil & Gas Sector Instil Market Optimism
  • Top Countries with Proven Reserves of Crude Oil in Billion Barrels for the Years 2014-2019
  • Fossil Fuel Consumption to Remain Unperturbed Despite Rise of Renewables
  • Breakdown World Energy Demand (in %) by Fuel Type for the Years 2019 and 2040
  • Emphasis on Migration from Onshore to Offshore Operations to Augment Long-Term Growth Prospects
  • Offshore Oil and Gas Exploration & Production Expenditure Worldwide by Segment (2015-2019): Percentage Breakdown of Expenditure for Drilling, Engineering, Procurement, Construction, Installation (EPCI), Life of Field, Offshore Supply Vehicle, and Subsea
  • Growing Importance of Deep & Ultra Deep Water Hydrocarbon Exploration Instigates Robust Growth
  • New Offshore Projects Worldwide Prioritize Deep & Ultra Deep Water Exploration
  • Breakdown of Global Oil Production Volume by Onshore, Offshore, and Offshore Deepwater Activity for the Years 2011, 2015 and 2019
  • Subsea Capital Expenditure Worldwide by Depth of Installation (2019 & 2022): Percentage Breakdown of CAPEX for Installations at Depth of Below 99 Meters, 100-499, 500-999, 1000-1499, and 1500 Meters and Above
  • Rise of Sophisticated EOR Technologies Augments Subsea Systems Market
  • Brief Description of EOR Methods
  • A Glance at Select Chemical EOR Projects Worldwide
  • Technology Advancements Widen Scope & Span of Subsea Systems
  • A Brief Review of Technology Innovations in the Subsea Systems Domain
  • Digitalization and IoT Step-In to Revolutionize Subsea Landscape
  • Subsea Systems Market: Strongly Influenced by Trends in Oil Prices
  • Crude Prices Tumble as Covid-19 Pandemic Weakens Demand
  • Average Annual OPEC Crude Oil Prices (in US$ per Barrel) for Years 2010 through 2021
  • OPEC Steps In with Production Cut Strategy to Curb Declining Trend in Crude Prices
  • A Glimpse of OPEC’s April 2020 Production Cut Deal
4. GLOBAL MARKET PERSPECTIVE

III. MARKET ANALYSIS

GEOGRAPHIC MARKET ANALYSIS

UNITED STATES

CANADA

JAPAN

CHINA

EUROPE

FRANCE

GERMANY

ITALY

UNITED KINGDOM

SPAIN

RUSSIA

REST OF EUROPE

ASIA-PACIFIC
  • Indian Hydrocarbon Sector Demands Investments in Deep & Ultra-Deep Water Oil & Gas Fields for Energy Security
  • Market Analytics
AUSTRALIA

INDIA

SOUTH KOREA

REST OF ASIA-PACIFIC

LATIN AMERICA
  • South America's Deep & Ultra Deep Water Exploration & Production Market: A Brief Note
  • Market Analytics
ARGENTINA

BRAZIL

MEXICO

REST OF LATIN AMERICA

MIDDLE EAST

IRAN

ISRAEL

SAUDI ARABIA

UNITED ARAB EMIRATES

REST OF MIDDLE EAST

AFRICA

IV. COMPETITION
  • Total Companies Profiled: 36
Note: Product cover images may vary from those shown
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