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40% growth in subsea expenditure forecast

Posted: 8 March 2003

The new edition of ‘The World Subsea Report’ published today by leading energy analysts Douglas-Westwood and industry data specialists Infield Systems forecasts strong growth over the period 2003-2007. Global capex in the subsea sector is expected to total $48.6 billion – an increase of more than 40 per cent compared to the previous 5-year period. The average value of the global subsea market is expected to rise from $6.8 billion/year in the 1998-2002 period to $9.7 billion/year in 2003-2007.

650 Projects in Prospect

According to study team leader Dominic Harbinson, “We have analysed 650 subsea projects that are currently under consideration for development over the period to 2007 and these were input to a specially developed model to value world subsea markets. We expect the total value of the global subsea market over the next five year period to exceed $48 billion and it could be more if the long-term growth trend continues. Drilling and completion of subsea wells represents the most significant market segment in value terms, amounting to some $23.5 billion or 49% of the total capex forecast. Flowlines, both rigid and flexible, make up the next biggest with a value of approximately $15 billion, or almost 30% of the forecast subsea market.”

Africa to be 25% of the Market

“Considering the worldwide picture, activity is fairly widespread amongst the various regions, although Western Europe is forecast as being the leading market at 27 per cent share, slightly ahead of Africa at 25 per cent,” said data manager Dr Roger Knight of Infield Systems. “However, a definite flattening off of numbers of European prospects is evident, whereas West African prospects continue to grow.”

Petrobras to Lead the Pack

“We expect Petrobras to retain its position as leading subsea operator with 271 subsea wells forecast for the 2003-2007 period. The Capex associated with these installations is estimated at just under $8.5 billion – equivalent to 17 per cent of the global spend over the period. For Shell, BP and TotalFinaElf, fairly similar levels of activity are forecast over the 2003-2007 period with each having an estimated Capex of around $4 billion or 8 per cent of the global spend. ExxonMobil and Statoil follow quite close behind with forecast spends of $3.6 billion and $3.3 billion respectively.”

Deepwater Subsea Spend to Overtake Shallow Water

“Our forecasts indicate that, for the first time, over the next five years the number of subsea wells coming onstream in deepwater will exceed those coming onstream in shallow water,” said Harbinson. “This will result in deepwater subsea activity increasing by 170 per cent and relates principally to activity off Africa, Brazil and the US Gulf of Mexico. Capex in the deepwater subsea segment ($26.1 billion) is also expected to exceed that in shallow water ($22.5 billion).”

This third edition of The World Subsea Report has been re-written to cover the period 2003-2007. It provides the industry executive with an overview of the growing subsea production segment of the offshore industry and the value of world markets. It describes the technology used in subsea developments and analyses the 650 subsea projects under consideration for the period to 2007. These are input to a specially developed model to value world markets over the five-year period.

The World Subsea Report is aimed at decision-makers in oil companies and executives in the supply industries and the financial sector. It has become the definitive work on the market prospects for the subsea sector. Previous editions were purchased by the leading subsea sector players in 16 countries.


Posted by Richard Price, Editor

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