Expansion of the Global Fleet of Subsea Oriented Vessels ... - Tor Espedal.pdf · Expansion of the...

Expansion of the Global Fleet of Subsea pOriented Vessels vs. the Global Market Outlook

Presented by Vice President of Subsea 7 Tor EspedalPresented by Vice President of Subsea 7, Tor Espedal

World Oil Demand

Primary Oil Demand Global Energy Situation

www.subsea7.comSubsea Partner of Choice 04.06.2008

Source: IEA, Douglas Westwood, Econ

World Oil Supply & Oil Price

Reserve Replacement Ratio


Source: Handelsbanken Markets

World Oil Supply & Oil Price – Global Capex Outlook

2003 2008 - 2012


World Oil Supply & Water Depth

Expected Subsea Installation Projects → 2011Subsea Well by Water Depth


Source: Strategic Offshore & DnB Nor Markets

World Oil Supply & Water Depth – Top 70 Projects 2008-2012

OPEC33 %

Non-OPEC67 %


E&P Spending vs. Previous Years Oil Price

“We estimate that contracts worth almost US$ 0 5 tn will beworth almost US$ 0.5 tn will be awarded to oil service companies in the next two years”

Goldman Sachs talking about the outlook for the oil service industry


Source: IEA, Handelsbanken Capital Markets

Capex Trend and Capex in Subsea – Global Capex vs. Subsea Capex

“Oil Services, still early in theearly in the super-cycle”

70 000

Handelsbanken Capital Markets

40 000

50 000

60 000

$ (m

)

10 000

20 000

30 000US$

02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Subsea Capex Total Capex


Capex in Subsea

Vessel Days pr. Million Revenue

3 Yr Moving avg.


Source: Market info

Oil Price

Factors Influencing the Subsea Market

• Increased demand for oil• Era of big discoveries bypassed?• Easy to reach fields already found• OPEC flow at $ 80 a barrel

Increased nationalization of oil fields• Increased nationalization of oil fields

• Advances in flow assurance• Subsea boosting & separation• Deepwater installation technology

Technological Dev.Discoveries

• Negative reserve replacement ratioincreased the need for exploration

• Increased tie backs and tale endGrowing Demand for

Subsea Vessels

• Deepwater installation technology• Heavy insulation coating and/or

electrical heating systems

• Increased tie-backs and tale end production

• Size of discoveries influence theextent of subsea work

• More discoveries deepwater.

• More acreage are searched• Increased focus on tail-end and tie-inIncreased focus on tail end and tie in projects• Introducing new exploration concepts

Rig Consortiums one example• Re-development of fields the majors have

abandoned


abandoned

New Operators

Current Fleet – 197 Vessels


Source: Market info

Factors that Influence Vessel Demand

• Remedial work • Survey

• Repair

• Inspection

• Maintenance

• Weather

• Pipelaying

• Tie-in projects

• Construction work

• Water depth

• Location of spool &

fabrication bases

• New construction

• Virgin ground

• Little existing

infrastructure

• Location of spool &

fabrication bases


New Builds – 2008-2011

“Short-term we see potential for margin increases, but increased supply will put pressure in margins long-term.”

Diving22 % pressure in margins long term.

D B NOR M k tRigid Lay

22 %

Type of New Builds Split on Delivery

DnB NOR MarketsRigid Lay11 % Construction

67 %

“The outlook for the offshore construction industry has improved materially in recent months”months

Morgan Stanley


Source: Market info

Gross Supply & Demand

Utilization Pipelay Vessels 2010 - 2012“we believe demand will still grow faster than supply.”

Morgan Stanley on demand for

construction vessels

Demand Scenarios Construction / ROV


Source: Strategic Offshore, Infield, Internal

Why Difficult?


The Finance Market Reaction to the Future Balance - Backlogm

illio

n$

m


Source: Market info, Oslo BørsSource: Market info, Oslo Børs

5000

Subsea 7 Backlog by Region

4000

5000Asia/PacGoM

3000

4000 GoMAfricaBrazil

2000

BrazilNorwayUK

1000

02003 2004 2005 2006 2007


Source: Market info, Oslo Børs

Share Price Comparison


Source: Market info, Oslo Børs

Asset Investment - New Vessels

Seven Oceans

The Seven Oceans is a state-of-the-artpurpose built deepwater rigid pipelay vesselfitted with an advanced flexible pipelay system,capable of operating in water depths of3,000m, with up to 400t top tensioner and a3,500t main reel.

Seven Seas

The Seven Seas is a new flexible deepwaterpipelay and construction vessel with 400t toppipelay and construction vessel, with 400t toptensioner VLS, 400t J-lay 400/350t crane and3,000t carousel. It is capable of operating inwater depths of 3,000m.


subsea partner of choice


Expansion of the Global Fleet of Subsea Oriented Vessels ... - Tor Espedal.pdf · Expansion of the...

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