Douglas-Westwood (DW) forecasts global subsea hardware capex will total US$117 billion (bn) between 2014 and 2018.
This represents growth of more than 80% compared with the preceding five-year period. In 2013, subsea tree installations were lower than expected, with delays in crucial projects off Brazil and West Africa. However, DW predicts an increase through to 2018, with major manufacturers reporting strong backlogs.
The global financial crisis in 2009, and the Gulf of Mexico oil spill in 2010-2011, limited growth in subsea hardware spend in the 2009-2013 period.
The strong growth forecast in the next five years is due to a favourable outlook for offshore activities in the established deepwater provinces and the start of field development in new frontier areas, such as the Eastern Mediterranean and East Africa. Subsea hardware spend will be the highest in Africa, Latin America and North America, with the three regions combining to form almost half of the global total.
Expenditure continues trending towards deeper waters with around 44% of total spend in the next five years targeting projects in water depths greater than 1000m.
Subsea production equipment is to attract almost half of all expenditure by component, as high-value projects are set to come onstream after tree awards reached record levels in 2013, underpinning the elevated levels of subsea expenditure over the coming years.
The SURF market makes up over a third of expenditure, driven by the development of remote fields, the addition of new project phases and the tie-back of satellite fields into subsea hubs. Pipelines make up the remaining spend, increasing considerably until 2016, driven by a few large offshore pipeline projects and several smaller tie-back pipelines.
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