With over eighty percent market share in both terms of dollars and in total kilometer awards; Technip and Oceannering take Q3 2014. Their total market share includes supplying one hundred percent of this quarter’s 74.6 km thermoplastic SPU awards all of which were awarded to the North Sea.
Over ninety five percent of the Q3 2014 global subsea production umbilical awards (steel and thermoplastic) went to the North Sea and North America. Sixty one percent of the total km went to the North Sea, thirty seven percent to North America, and the reaming two went to Africa/Med.
With the exception of two SPU awards by Total and Shell (both in the North Sea) the third quarter of 2014 was significantly driven by independent operators. Over 83 km of the total 126 km of subsea production umbilical awards were award by Tullow Oil, Stone Energy, LLOG, Deep Gulf Energy, Apache, and Iona Energy. More than half of the independent awards came from two projects in the Gulf of Mexico; Deep Gulf Energy’s “Odd Job” and LLOG’s Mississippi Canyon MC705.
Quest has reduced its five-year SPU award forecast by just under nine percent since the September deliverable. The adjustment is a result of awards pushing to the right, especially near-term, as a result of regional softening of the market expected in the next 18-24 months. This is not a result of expected loss of projects in the pipelines.
With deepwater projects becoming more complex, operators are seeking contractors who have larger assets that are able to carry out complex scope of works. We are currently tracking 32 newbuild vessels scheduled for delivery between 2014 and 2017 with 18 of them being built specifically for long term contracts with Petrobras. Allseas has the Pieter Schelte scheduled for delivery in late 2014 and has already signed its first contract with Shell for decommissioning activities on Brent field. Ceona’s Polar Onyx has been delivered and has mobilized to Brazil to begin its one year contract with Petrobras. The Ceona Amazon is scheduled for delivery in 2015. McDermott will add flexlay sister vessel Lay Vessel 108 to the fleet in 2014 and a newbuild S-Lay vessel, DLV 2000, in 2015. EMAS AMC has taken delivery of the Lewek Constellation and it has finished its maiden project, Vaalco’s Etame Marin Field, and is now having its Multi Lay tower installed at Huisman. Technip and Subsea 7 both have construction vessels in the shipyard in addition to their newbuild vessels for Petrobras. Newbuild deliveries for 2014 have been on schedule. Please see a summary table below of the 2014 newbuild deliveries schedule.
The Gulf of Mexico will see depressed installation levels in 2015 and 2016 after elevated installation activity in 2013 and 2014. 2013 and 2014 have seen significant pipeline installs in the Gulf of Mexico. Lucius and Jack St. Malo export lines are the main contributors to the spike in installation activity for 2013 and the increased installation activity in 2014 as well as other large projects such as the Keathly Canyon Connector, SECKO pipeline and exports serving Big Foot and Delta House are large contributors to the increase in this region for these two years. This region is expected to see a lull in installation activity in 2015 and 2016 before picking back up in 2017. The Forecasted five year installation demand is largely composed of pipeline infrastructure for developments such as Anadarko’s Lucius, Chevron’s Big Foot, LLOG’s Delta House, and BP’s revamped Mad Dog Phs 2 development.
In the UK and Norwegian areas of the North Sea there is a strong demand for life of field work. Market awards for some large SURF projects are currently delayed and rising costs could result in the award of new projects being postponed.
With the decision to cancel the current development plan for Browse LNG project, trunkline installation activities for Australasia have declined in 2016, however installations on other LNG projects such as Gorgon, Wheatstone, Julimar and Ichthys will contribute to Asia Pacific’s increasing demand. Saipem and Allseas are the leading contractors in the Asia Pacific Deepwater Pipelay segment with the installation of Gorgon, Wheatstone and Ichthys export pipelines.
Installation activity in African Mediterranean region has increased from depressed 2013 levels with installation activities for WDDM Phase Ixa and Jubilee occurring in 2014 and additional activities expected for Kizomba Satellites Phase 2, Lianzi, Mafumeria Sul Block O., Moho Nord and Ten Complex in 2015. There is a decrease in the 25+ OD category in the Africa/Medit. region which includes the Black Sea in 2015 is due to the cancellation of the South Stream Pipeline.
The Sonangol Congo River Crossing Pipeline Project, Santos Basin Rota Cabiunas, Staoil’s Gudrun project and Cardon IV’s Perla project contribute to the contractor’s installation awards.
Major installation contract awards this quarter include Statoil’s Gullfaks Rimfaksdalen (GRD), Anadarko’s K2 Riser Base Gas Lift project, Chevron’s Bangka Development and EnQuest’s Kraken project.
Major contract award for this quarter was Shell’s Coulomb Phase 2 project.