There is some uncertainty about activity levels in the U.S. Gulf and worldwide, but the general consensus is that 2014 should be another good year.
This is mirrored in two recent market analyses from Douglas-Westwood, a global energy industry market research and consulting group.
Its first report notes that 39 deepwater rigs owned by big contractors such as ENSCO, Transocean and Seadrill — 22 percent of the worldwide fleet — are coming off contract in 2014. This may seem daunting but these rigs will be seeking work in a market with utilization rates at five-year highs. That market includes the Gulf of Mexico, where activity rates are forecast to remain strong. Add in the potential activity from the projected opening of Mexico’s deepwater GOM provinces, and there appears to be little reason to worry about deepwater rig utilization rates. Indeed, for well completions alone, Douglas-Westwood predicts a 20 percent compound annual growth rate over the next five years, with a good portion of that allocated to the GOM.
The the company’s second report is on the offshore maintenance, modifications and operations services market, where 2013 demand totaled $112 billion for the world’s “nearly 9,000 offshore platforms.” Significant growth is projected for the sector — up to a $672 billion spend over the 2014-2018 period. That represents a 31 percent growth rate over the previous five-year period. The growth, notes the report, “is driven by a combination of high oil prices, buoyant offshore development activity, aging infrastructure (requiring modification) and price inflation for equipment and services.” Spending during the 2014-2018 period will be led by Asia, with 30 percent of global expenditures in the market, compared to North America’s 27 percent.