Subsea segment surges with growing deepwater drive, finds Rystad

Rystad Energy has predicted a significant influx of capital in the subsea market segment, with a 10% annual compound growth rate (CAGR) from 2024 to 2027

This includes players involved in production and processing systems such as subsea umbilical risers and flowlines (SURF), trees, wellheads, manifolds and other components. 

Total spending can reach beyond US$42bn by the end of 2027 as operators increasingly focus on advanced equipment and installation services. Signed in June, Woodside Energy's contract with DeepOcean for subsea inspection, maintenance, and repair (IMR) services for Sangomar field offshore Senegal remains one of the latest instances of such developments. 

This suggests cumulative spending to reach as high as US$32bn by the end of 2024; a 6.5% increase from the previous year. This growth is driven by strong activity across services, equipment and SURF, largely fueled by significant investment in deep and ultra-deepwater projects. 

Deepwater developments are set to dominate the subsea sector, accounting for 45% of the market from 2024 to 2028. Golfinho in Mozambique is a significant greenfield project.

Ultra-deepwater activities, driven by major floating production, storage and offloading (FPSO) initiatives are projected to capture 35% of the market. One of the notable brownfield projects in the sector is Nigeria's Egina.

In the SURF sector, global installations, 10% of which can come from Angola, are anticipated to reach 3,500 kms in 2024. The installation rate is anticipated to grow at a CAGR of 15% from 2024 to 2028, with Angola being a major market.

TotalEnergies holds a strong position in deepwater and ultra-deepwater exploration and production in Africa, especially in Angola and Nigeria.

CCS applications

The subsea sector is also expanding beyond traditional oil and gas applications. The push for carbon capture and storage (CCS) is creating new opportunities for suppliers and spurring research and development in this emerging market. Consequently, suppliers are leading the way in developing more efficient subsea production systems, which are set to see broader adoption.

“The subsea market has rebounded robustly from the impacts of Covid-19, which caused a significant 20% drop in expenditure in 2020. By 2021, the industry began to recover, with spending increasing by 5% to reach US$23bn. Looking ahead, we anticipate steady growth in the subsea sector, fueled by advancements in deepwater exploration and CCS. This recovery highlights the industry’s resilience and suggests a promising trajectory of consistent progress,” said Sanwari Mahajan-analyst, supply chain research, Rystad Energy.