Executive Briefings

Offshore Maintenance Market Expected to Bounce Back from Oil Price Decline

Forecasts call for a steady recovery from the recent oil price downturn in the offshore maintenance market with spending expected to improve significantly between 2017 and 2021.

Offshore Maintenance Market Expected to Bounce Back from Oil Price Decline

Ben Wilby, author of World Offshore Maintenance, Modifications & Operations Market Forecast 2017-2021, says, "Despite there being considerable price pressure on MMO providers, the key drivers of spend remain strong with numbers of global and fixed platforms, degradation of existing assets and industry regulation all contributing to 4.1 percent CAGR growth in global offshore MMO expenditure over the 2017-2021 period".

In 2017, expenditure is forecast to total nearly $81bn for the world’s global offshore platform population of approximately 8,700 fixed and floating assets. 2014 was the peak year for MMO expenditure and saw spend of $106bn, says Wilby, demonstrating how much costs have come down in the years in between. 2017 should, however, see the beginning of an improvement after a decline of 26 percent between 2014 and 2016.

There are a huge number of companies involved in the MMO sector. “Modifications run through a range of things – from modifying a fixed platform for a sub-sea tie-in to adding a new gas treatment plant onto a platform,” says Wilby. “Many are related to boosting production, but others are for upgrading facilities such as accommodation or communications. Much of this work can be classed as non-essential at a time when many fields are below or just breaking even, and as a result are being deferred. However, this work will have to be done at some point and the backlog of work to be completed is building as a result of these deferrals – which should result in a boost to expenditure near the end of the forecast.”

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Ben Wilby, author of World Offshore Maintenance, Modifications & Operations Market Forecast 2017-2021, says, "Despite there being considerable price pressure on MMO providers, the key drivers of spend remain strong with numbers of global and fixed platforms, degradation of existing assets and industry regulation all contributing to 4.1 percent CAGR growth in global offshore MMO expenditure over the 2017-2021 period".

In 2017, expenditure is forecast to total nearly $81bn for the world’s global offshore platform population of approximately 8,700 fixed and floating assets. 2014 was the peak year for MMO expenditure and saw spend of $106bn, says Wilby, demonstrating how much costs have come down in the years in between. 2017 should, however, see the beginning of an improvement after a decline of 26 percent between 2014 and 2016.

There are a huge number of companies involved in the MMO sector. “Modifications run through a range of things – from modifying a fixed platform for a sub-sea tie-in to adding a new gas treatment plant onto a platform,” says Wilby. “Many are related to boosting production, but others are for upgrading facilities such as accommodation or communications. Much of this work can be classed as non-essential at a time when many fields are below or just breaking even, and as a result are being deferred. However, this work will have to be done at some point and the backlog of work to be completed is building as a result of these deferrals – which should result in a boost to expenditure near the end of the forecast.”

Read Full Article

Offshore Maintenance Market Expected to Bounce Back from Oil Price Decline