The last five years has seen the subsea market grow into a fully integrated sector of the global offshore industry. The extent of the importance of the sector is most apparent in the areas of deepwater and the frontier developments in ultra-deepwater. It is fair to say that without the enabling technology that the current subsea equipment manufacturing are bringing to the table, the engine of growth and activity that is driving most of the major operators would be moving at a much slower pace.

But whilst the growth of the past five years has been impressive both in volume and value terms, the next five years is likely to see a swathe of new records set in volumes, values and technical achievements. The number of subsea production wells forecast to be drilled and completed in the period 2004/08 at 2,121 wells is 71% higher than the previous five year period. The overall value of these wells if forecast at over $31bn with deepwater (=500m) representing 45%.

Even as a subset of the wider subsea market, the expenditure related to subsea equipment is still considerable and represents significant growth and development. As a relatively tight market with only five key suppliers there are already questions being asked as to whether the industry can meet the forecast demand.

In order to satisfy the record growth in subsea wells, over 2,682 templates, manifolds and trees are forecast to be installed with Africa (32%), Europe (27%) and North America (18%) representing the main markets. The tree and the manifold market are heavily influenced by the West African market. The growth in forecasts is directly related to the fields in Angola and Nigeria. The impressive list of orders forecast for 2004 and 2005 includes amongst others; Batuque (Block 15), Cravo (Block 17), Mondo (Block 15), Orquidea (Block 17), Plutao (Block 31), Plutonio (Block 18), Rosa (Block 17), Tomboco (Block 14), Agbami, Akpo, Bonga Southwest, Chota and Ukot.

Discussions with the key equipment suppliers suggest that they can meet the expected level of demand. Considering the addition of manufacturing capacity over the past three years and combining this with improvements in delivery and overall supply chain management then there is a convincing case to believe there will not be bottlenecks in supply.

Source; Global Perspectives: Subsea - Market Update 2004/08

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