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Subsea Oil and Gas Sector Set for 14.8 Per Cent CAGR Growth to 2017

28 February 2013

The outlook for the Subsea industry is amongst the most promising in the offshore oil and gas world, with Subsea Capital Expenditure (Capex) set to grow at a staggering 14.8 per cent CAGR to 2017, new research by Infield Systems reveals.

In recent years, offshore market conditions have forced operators to push their E&P efforts to deeper, more remote and harsher locations in order to tackle declining production. In addition, the advancement of subsea technology, coupled with improved manufacturing techniques has lowered the cost associated with developing certain types of fields, enabling a number of smaller, previously uneconomical fields to be tied-back into existing infrastructure.

2012 proved to be an encouraging year for the global subsea industry. For the first time since 2008, Infield Systems recorded 416 new subsea tree orders, compared with 321 orders in 2011, and more than 320 trees were brought on-stream – 60 more than in the prior year.

This positive trend looks set to continue into 2013, with over 500 new subsea tree orders forecasted and up to 370 subsea tree installations, mainly driven by investments in the ‘Atlantic Triangle’; West Africa, Brazil and the US GoM.

Among the most anticipated awards are: Total’s Egina, with an order for over 35 trees and Chevron’s award for Block 14, which could potentially add a further 21. BP’s PAJ development is expected to announce its award during the second half of 2013, adding up to 30 tree orders to the market. In Brazil, Petrobras is moving towards making an award for the first tranche of subsea infrastructure for its Libra and Carioca fields, as well as the second tranche for its Franco development.

In total, operators are expected to invest more than US$19 billion in Capex for subsea production equipment during 2013, a figure that is likely to grow to US$33.3 billion by 2017.

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