Market conditions have been brutal for the subsea industry, which is working to recover from the downturn, but activity is gradually improving with more work expected this year, according to the head of one of the largest subsea engineering, construction and services providers.
Subsea 7 CEO Jean Cahuzac expects the subsea market will see more awards coming its way in first-half 2018 for subsea umbilicals, risers and flowlines as well as conventional projects. Tenders on the horizon could include awards for work on projects for fields offshore Angola (Zinia), Australia (Gorgon Phase Two), Brazil (Libra), India (98-2) and Mozambique (Golfinho and Mamba)—to name a few—in the short to medium term.
However, the timing of these awards remains uncertain, Cahuzac cautioned while speaking analysts on the company’s latest earnings call. Forthcoming conventional awards could also come offshore Nigeria, he added. Gearing up for more shallow-water work, the company is already planning to return its Seven Inagha offshore supply vessel to active service this year.
“The oil and gas market has seen a gradual increase in activity with a growing volume assumption in the world. However, at present pricing it’s challenging and we expect margins to remain low until excess capacity is utilized,” Cahuzac said. “We are addressing this through our lower cost solution using our experience and technical expertise to drive out inefficiencies.”