MOUNTAIN VIEW, California – Increasing demand and decreasing reserves in existing wells are two main factors driving the adoption of subsea equipment in the oil and gas industry. An analysis by Frost & Sullivan goes on to predict the subsea equipment market in 2018 to reach $35.84 billion, up from $23.13 billion in 2013.
“Technological advancements that have led to higher production and safer, cleaner processes encourage energy companies to move further offshore, thus widening the scope of the global subsea equipment market,” said Frost & Sullivan Energy and Environmental Industry Analyst Rajalingam Chinnasamy. “As the subsea factory of the future is expected to include a complete production system on the seafloor, the prospect for equipment vendors is secure.”
The report also points to shortage of skilled labor, vessel crews, and equipment are constraining factors. Other short- and medium-term constraints include the high costs of subsea projects and reluctance on the part of manufacturers to invest in research and development. One way suppliers may succeed in the market is to establish niche areas of technology, says the report.
“Mergers, acquisitions and partnerships will help subsea equipment suppliers leverage expertise across the board and penetrate the market successfully,” observes Chinnasamy. “Major participants must especially partner with or acquire hardware suppliers and software providers to widen their product and service portfolios.”