The Global Subsea Market

You can’t fight fashion

Choosing image over substance shouldn’t be difficult. For some it isn’t easy. Depends on who you want to please. The substance of the subsea market right now is a modest turning point has been reached. The image issue applies to anything to do with oil and gas, which seems expected to wear a bogeyman t-shirt as a new standard uniform, and then continually apologise for its very existence.

Four years of being down and crawling about the floor in a daze, and the subsea market has started to turn up. Only a little. It’s a start. And the market should now start to show some steady growth, but in an understated, modest fashion rather than being a flashy, fashion obsessed clotheshorse constantly seeking attention.

Green’s become an important colour. Important because we finally see proper green shoots of recovery. Then the green revolution is important because it changes absolutely everything - or likes to say and think it does. Everyone might be trying to cultivate a super-green image, whether real or window-dressing, but then no-one admits how vital oil and gas will still be to the world for decades. The fashion will be to introduce all sorts of green initiatives, but still expect oil and gas to be there as a backstop. Governments bow to short-term headline soundbites, telling oil companies they are no better than pariahs, but still expect them to be there regardless. Energy policies need a lot more planning than just the cycle of government elections. That’s what creates spikes.

Recoveries aren’t easy to start. In subsea, it’s only demand that’s a bit better. The North Sea and shallow international areas have turned a corner, but deepwater will take longer to get a shot in the arm. Supply is still a mess. Oversupply can hold the market to ransom. Fleet management can help, but that takes concerted effort. Long idle vessels complicate the issue too. They won’t just disappear, but some won’t be easy to reactivate without significant money being spent. When clients are obsessed with carbon intensity and emission targets, a subsea support vessel that barely has any vessels with battery packs and energy recovery systems, runs the risk of being out of whack with what clients expect. With oversupply present and the industry’s increasingly reviled status, that hardly will make anyone keen to take the risk and build regardless.

Money could be a big issue all around. Investment houses are expected to be green too and have nothing to do with oil and gas. The investors involved are going to change. Oil companies should be fine as they’ll also provide decent returns, but for the rest of the supply-chain this could be problematic.

The new issue of Strategic Offshore Research’s definitive annual Global Subsea Market forecast goes through all these issues and their implications. This year’s edition runs through 2026 reflecting the industry is both late cycle and has long gestation periods. This time a “what if” scenario in particular is run on the DSV side of the market where the core of the fleet is very old and what sort of pressure point that could produce. Another pinch-point on flowline installation as the result of consolidation is also highlighted.

As always, the report is direct and thought-provoking. All the flimflam of the industry is torn down and distilled to what the industry really needs to know. Some of the answers aren’t pretty, but that’s how the market is. There are risks, there are opportunities and the report examines them all and explains what’s really going on and what is ahead.

For further details contact Jo Slade at jo@strategicoffshore.com or telephone +44 1224 498020.

Subsea Market to 2026 Table of Contents

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