Image courtesy Optime Subsea Services.

Image courtesy Optime Subsea Services.

OPPORTUNITIES for new players in subsea technology markets will be limited in coming years as the majority of work in the sector shifts towards brownfield and infill projects, an industry analyst says.

Speaking at the Australasian Oil & Gas Exhibition & Conference in late February, Quest Offshore consulting manager Sean Shafer said local demand for subsea trees had been falling since 2013.

While he expected this to start recovering from 2017, Mr Shafer said that this would be driven by brownfield activity and by backfill demand for existing projects.

“One thing to note about this, if you are a tree manufacturer and you are not basically locked into one of these major projects, we are going to see competition for three or four spots because, barring some major disaster, operators are going to go with the same manufacturers from previous projects,” he said.

However, for those with links to activity in the fields, this trend would be positive because it was likely to last for a very long time, Mr Shafer said.

“For 20-25 years we are going to see the continual drilling of wells, continuous installation of trees – you basically have to backfill these plants because the sunk cost is so high, they’re not going to just stop producing from these plants,” he said

“You will see that activity continue, but again, infrastructure is already in place for a lot of these projects, so in marine construction, pipelines and things like that, demand is going to be muted for mid to long term growth.”

With companies using their existing infrastructure, the subsea industry would need to focus on tiebacks and infrastructure led drilling – a focus on less complex, lower cost developments and on the intervention and workover of aging subsea wells.

Investing in oil exploration offshore eastern and southern Australia was important for building new opportunities for the nation moving forward, with new seismic studies required to help find new reserves.

These studies should focus on new basins in order to increase reserves and set the industry up for long term activities.

Mr Shafer also said that Australia would need to focus more on cost control and project execution, though he acknowledged that this was a global problem.

Creating a better dialogue between stakeholders, including labour forces and the public would be key to this, he said.

But Australia, and particularly Western Australia, would need to work hard to develop itself as a global industry centre and to attract foreign investment.

“Australia has a really, really narrow group of operators who account for most of its activity,” he said.

“New operators can bring new ideas, target new plays, new ways to develop projects, so making the country more attractive to outside investment and new operators is very important.”