The global subsea market and the continued development of its innovative technologies are more than just bubbling away nicely, according to a gathering of some of the world’s leading industry figures in Aberdeen, Scotland.
The health of the subsea industry is looking particularly robust as it heads on into 2013 on the back of several years of strong growth and increased focus by both the oil and gas majors as well as the contracting community.

A survey by the industry association Subsea UK, the findings of which were unveiled at the organisation’s annual event in Aberdeen, flagged up a belief by its member companies that they are set to grow by 20% or more this year alone, with some anticipating growth of more than 50%.

The survey revealed that 100% of its member firms are predicting significant growth in the next 12 months, with almost half expecting to grow by 30% and a third by more than 50%.

With nearly 90% having seen turnover and profits rise in 2012 (with more than half reporting growth of 20% and a fifth reporting more than 50% growth), the key drivers going forward are seen as – perhaps unsurprisingly – a sustained high oil price, and an increase in global demand.

But also, crucially, it highlighted the introduction of new technology and innovation, which are leading to more field developments becoming viable.

The fastest growing segments in the subsea arena are inspection, repair and maintenance, integrity and reliability, decommissioning and offshore wind power, said Subsea UK’s chief executive, Neil Gordon.

The subsea association’s optimistic outlook was backed up by figures given at the show by industry analyst Infield System’s market consultant Anna Karra, adding further evidence to boost the sector’s ‘feel good factor’.

In a presentation given in the opening plenary session, Karra highlighted a forecast total subsea capital expenditure for the period 2013-2017 of US $124 Bn. Of that figure, around $105 Bn will be spent on deepwater activity over the period, with the regions of Africa, Latin America and North America representing a huge 86% of the overall Capex figure.

Karra went on to highlight a figure of 345 subsea tree orders up to the end of the third quarter of 2012, and said that figure was expected to top 400 trees by the end of the financial year.

Of those trees, around 36% will have been supplied by FMC, with GE Oil and Gas close behind on 33% (with 55% of GE’s figure having come from the shallow water market in 2012). The other main players such as Cameron was forecast to have a 20% share of the subsea trees total, while Aker Solutions claimed 9% and Dril Quip 2%.

“The subsea market will average around $25 Bn per year from 2013 to 2017,” said Karra.

Gordon discussed the findings of his association’s survey and described the subsea industry in the UK as “the unrecognised jewel in the crown of British industry. The sector is one of, if not the, fastest growing in the country and these findings will come as no surprise to the oil and gas industry as a whole”.

He did go on to highlight, as many in the industry have done before, the continued challenge of finding, recruiting and retaining skilled people. The survey, he said, had revealed that 88% of Subsea UK’s members had cited this as their foremost constraint. Other challenges reported by its members included access to finance and working capital in particular, finding suitable premises, controlling costs and managing growth.

In terms of markets for the UK companies, their main international targets are Norway, Brazil, United States, South-East Asia, Australia, West Africa and the Middle East. Respondents were asked to rank their overseas markets in order of priority: Norway came out on top with 25% of those surveyed indicating it was their first focus over the next few years, followed by the U.S. (24%) and then Brazil (20%).

In terms of technology it was Aberdeen-based ITF, the global technology facilitator, that used the Subsea 2013 event to highlight what it sees as the key technology challenges for this year.

ITF and its members have identified a number of strategic challenges including unconventional reservoir characterisation, shale and tight gas stimulation, sub basalt imaging and seismic while drilling with borehole sources.

Following feedback from its members, it said that challenges affecting production and subsea include annulus management, effective subsea processing, cost-effective subsea monitoring, increasing reliability of electric submersible pumps and affordable sour developments.

Issues affecting particular global regions have also been highlighted, namely produced water management in the Gulf Co-operation Council (GCC), and forecasting tropical cyclones and hydrodynamic modelling for oil spill response in Western Australia.

ITF, a not-for-profit organisation, is also highlighting issues affecting downhole pressure and temperature monitoring in wells.

ITF’s proven collaborative process, issuing global calls for proposals inviting developers and innovators to put forward technical solutions which, if successful, can receive up to 100% funding, is hoped will help to overcome these challenges.

Executive Chairman Max Rowe said: “What I see now is that even in areas of competition you can collaborate and retain competitive advantage, through the integration and understanding of a particular innovation or technology into overall processes. I am seeing several of the major operators and service companies acknowledging that there is still room to collaborate in competitive areas and I think that’s quite a significant change.

“We’ve got to use more technology and innovation to access scarce resources and use enhanced oil recovery to get more out of existing fields. Both of which can be achieved through collaborative R&D.”