In tandem with the wider energy industry, the traditional subsea sector is in transition. It is an evolution that has been taking place for many years as companies identified opportunities to apply their technology, knowledge and skills in other sectors beyond just oil and gas.
Global Underwater Hub has seen, and continues to see, this evolution as members increase their work in other underwater sectors, including offshore wind, marine renewables, defence and aquaculture. This not only demonstrates how the supply chain is supporting the energy transition, but how companies are diversifying and remaining agile to new opportunities.
The UK-based energy industry and its associated supply chain have, for decades, provided a substantial contribution in supporting the development of energy exploration and production around the world. That expertise and reputation continues to be trusted internationally today.
Global Underwater Hub has hosted a number of international trade delegations in recent months, including from Estonia and Barbados, who are keen to learn from the UK underwater supply chain and build connections with these companies. As the UK continues on its path to net-zero, while ensuring the security of supply, we anticipate many more such visits.
Analysis by Global Underwater Hub’s SubseaIntel team notes that the global energy mix, transition, supply and security balance presents a different picture region by region. The maturity of conventional reserves and basins, together with the state of progress or aspirations for transition and net-zero targets, can drive significantly different opportunities and near-term outlooks. The data shows that the subsea sector is evolving around the world.
The United States has taken an aggressive approach to offshore wind. It announced one of the largest gigawatts ambitions – 30GW by 2030 – and aims to achieve this through lease awards (18GW) and area calls (21GW).
To date, most offshore wind development has focused on the east coast, including Vineyard Wind and Sunrise Wind. In late 2022, following the New York Bight record-breaking licences, California announced the awards in its much anticipated first leasing round, with the projects expected to be floating rather than fixed solutions.
North America remains a major player in conventional offshore oil and gas, with operations in offshore Gulf of Mexico vital to retaining energy security. Activity is expected to pick up following a raft of announcements from majors and independents, with near-term operations at Kosmos Winterfell, tie-back options to Talos Ram Powell field and bp Atlantis, Mad-Dog 2 and Thunder Horse developments ensuring and increasing production.
While the Biden administration’s Inflation Reduction Act concentrates on clean energy, it also spurs future oil and gas activity which will help the sector remain buoyant. The Act aims to accelerate hydrogen and CCS projects in tandem and should stimulate further developments, including the offshore Bayou Bend CCS project.
In Canada, Equinor looks set to launch key contractor processes to unlock its Bay du Nord development.
Opportunities at either end of the conventional energy life cycle abound in Asia as the region looks to secure energy provision by developing its vast oil and gas reserves. At the same time, it is seeking to introduce guidelines for decommissioning existing structures, bringing it more in line with more mature basins such as the North Sea.
The Sarawak and Sabah regions of Malaysia are expected to see increased development as major projects including Rosmai-Marjoram and Gumusut-Kakap-Geronggong-Jagus East (GKGJE) progress. While expanding oil and gas activities, many countries in the region have been keen to tie these into net-zero commitments, seeking to abate the high CO2 output of gas development with integrated CCS projects. Petronas-Carigali’s Kasawari project offshore Malaysia and bp’s Tangguh expansion in Indonesia are two such examples.
Many Asian countries have taken strong positions with regard to offshore wind. A combination of coastal conditions, a strong background in incremental technological improvements and an appetite to collaborate with experienced international players, creates an environment where floating offshore wind, in particular, could accelerate at pace. This produces a compelling opportunity for supply chain companies that have gained experience from early projects in Europe to look to the region.
Australia also recently announced plans to develop six priority regions for offshore wind, beginning with the Gippsland Basin which is already the proposed home to the Star of the South 2GW project. This comes in addition to what is expected to be an increase in domestic offshore gas projects.
Brazil’s vast deepwater oil reserves in the prolific Santos and Campos basins, supported by recent sustained exploration success offshore Guyana, have long characterised South America’s offshore energy position. Although an oil and gas focus continues, plans for offshore renewable energy generation in Brazil and Colombia are advancing.
The two nations are expected to finalise their positions and the contracting environment for offshore wind concessions in the near future, including any available subsidies and the auctions of the fist offshore leases. Outline plans suggest that Brazil alone could develop upwards of 106GW of wind power.
In the traditional offshore oil and gas market, Brazil began 2023 with approval of TotalEnergies Lapa South-West development together with Petrobras’s high impact Morpho exploration programme, which aims to unlock a large-scale production centre to the north of the region.
Along with maintaining a focus on oil and gas, Petrobras noted in its recently approved strategic plan the intention for several large CCUS projects at its Santos Basin developments, further illustrating plans to evolve its energy generation mix.
Nations in north-west Europe look set to benefit by being early movers in renewable energy with substantial opportunities to adapt their energy mix and also export their knowledge and expertise.
Norway is expected to tender for both the Utsira Nord and Southern North Sea for floating and offshore wind licenses, whilst at the same time increasing oil and gas production to support a stable energy supply to Europe.
AkerBP has submitted 10 production plans, signalling its ambition in the country in an environment of stability, strong returns and profitability against an average cost of $35-40USD per barrel.
Equinor itself will seek to maximise production from existing infrastructure with an exploration programme of 25 wells that can be tied to existing fields at better commercial terms and lower carbon emissions.
In UK waters, energy security dominated the agenda in 2022, with impacts into 2023 and beyond. A new licensing round was announced together with an aspiration to restart domestic production, as highlighted by new development plans being submitted to the North Sea Transition Authority.
Successful wind farm leases both in Scotland and England increased prospects for both fixed and floating wind, while the novel INTOG (innovation and Targeted Oil and Gas) leasing round helps to bridge the undeniable gap between current and future, transitioned energy.
In particular, the TOG (Targeted Oil & Gas) offering exists to support ongoing oil and gas production in the near term, decarbonises operations by providing wind powered electrification, offers a testbed for emerging technologies and provides continuous activity during transition and the kick-off of major offshore wind projects. The latter being vital for the supply chain to retain visibility of upcoming projects and provide the confidence to continue to invest in people and assets.
At the same time, hopes remain high for the second track of CCUS and hydrogen projects to be selected from a range of quality cluster candidates.
Analysis of the outlook for 2023 shows that the energy transition and changing energy mix are altering the opportunities for the subsea supply chain – in some cases expanding them. Subsea Expo has gained a reputation for being an exhibition where business is done, and this year’s free-to-attend event will once again act as a barometer for the industry.
The international outlook will feature throughout the event’s three days, with the business breakfast on the opening morning exploring global opportunities and an address from Argentina’s Secretary of Energy, Flavia Royon.
Around 150 companies and organisations from across the underwater supply chain will feature in the exhibition arena, showcasing its capability, innovation, technologies and skills. This will include companies such as: Boskalis, Bureau Veritas, Concept Cables, EODEX, J+S Subsea, JDR Cable Systems, Spectis Robotics and Subsea Tooling Services.
Running alongside the exhibition are multiple parallel conference streams. The conference programme will open with plenary session with industry leaders discussing the potential of the Blue Economy across the established and emerging underwater sectors. It will also feature an address from Mr Andrew Bowie MP, the UK Parliamentary Under-Secretary of State for Exports.
In total, around 90 industry experts will deliver presentations during the conference’s three days. Along with traditional subsea topics, sessions will explore the security of critical national infrastructure, cable technologies for floating offshore wind, the energy transition, and data and digital, amongst other topics. Speakers include representatives from Baker Hughes, Equinor, Motive Offshore Group, Oceaneering, Ping Petroleum, Siemens Energy and STATS Group.
Subsea Expo 2023 is shaping up to be an engaging and insightful event, highlighting the opportunities presented by the Blue Economy and the accelerating energy transition globally.
Read the latest issue of the OGV Energy magazine HERE