over the 2010-2012 period. Africa is on the verge of becoming the largest subsea market in the world - in 2006 only North America and Europe were larger. Over the 2008-2012 period we expect $53 billion will be invested in the African market; more then any other global region. The African subsea market is dominated by drilling and completion activity which accounted for 45% of the total market in 2007. New discoveries and developments in deepwater Angola, Nigeria and Egypt will drive drilling activity over the forecast period to $4.8 billion by 2012, larger than any other region. Further discoveries and developments in Brazilian deepwater plays will continue to drive growth in the Latin American market over the 2008-2012 period. Latin America subsea production is fundamentally deepwater, particularly off Brazil, the largest offshore producer in Latin America. Total reserves could amount to as much as 20-25 billion barrels of oil equivalent, 80% of which is in the Campos Basin. This, coupled with the disastrous impact of the 1979 oil price shock on the Brazilian economy, forced Petrobras to become one of the most innovative companies in the world in its use of subsea and FPS technologies. A large number of subsea projects are expected in Latin America over the 2008-2012 period, in particular in Brazil's deepwater Santos basin. New discoveries such as Petrobras' Tupi development will drive subsea capex in Latin America from $3.9 billion in 2007 to
$6.5 billion by 2012. Unlike other regions we expect drilling activity in Latin America to continue to grow throughout the forecast period. After a period of growth to 2009 where the expenditure will reach $3.7 billion, we expect the North American drilling and completions market to decline to $3.2 billion by 2012. Associated equipment such as subsea trees and manifolds will face a similar contraction, however, spend over the 2008- 2012 forecast period will remain higher ($36 billion) than historic spend over the 2003-2007 period ($30 billion). The future of the subsea industry will be divided between the technical challenges associated with accessing new reserves in increasingly deeper and harsher conditions and optimizing recovery from those areas already explored. Record oil prices have provided ample capital to develop assets but the industry will be increasingly reliant on attracting the right people in order to capitalize on the enormous opportunities ahead.
Douglas-Westwood Limited carries out commercial due diligence work for the financial community and business research, market analysis and strategy work for the international energy industry in both the upstream and downstream sectors. For more information please email publications@dw1.com or call +44 1227 780999.
Global Subsea Market by Region ($ millions)
50 45 40
Subsea Market ($billions)
35 30 25 20 15 10 5 0 2003
Rest of Europe UKCS NCS Nor th Amer ica Latin Amer ica Others A ustralasia A sia A fr ica
2004
2005
2006
2007
2008
2009
2010
2011
2012
www.seadiscovery.com
Marine Technology Reporter 35
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