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Quest Offshore Resources, Inc., a data and strategic market intelligence company for the offshore industry, said that the global subsea industry appeared to regain momentum through the first half of 2010 despite the regional turbulence in the U.S. Gulf of Mexico (GoM) created by the deepwater Macondo spill in April. North America is expected to see a material decline in near-term awards as oil companies involved in exploration, appraisal or development drilling are currently in a holding pattern. However, Quest has seen forward movement on major capital projects like Chevron’s Jack & St. Malo and Big Foot projects, as well as Shell’s Mars B as specific oil com- panies are green lighting projects for sanction in the third and fourth quarters of 2010. These key project awards in the early stages of the anticipated up-cycle will greatly benefit a supply chain eager for work — particularly U.S. Gulf Coast fabrication yards. The uncertainties surrounding the GoM have caused Quest to reduce the near-term demand for subsea equip- ment as a result of delayed drilling and the increased risk that will be associated with operating in the GoM and the inability or unwillingness of some of the smaller inde- pendents to participate. Quest believes that this event will increase M&A activity as some of those smaller independ- ents re-evaluate their GoM assets and the larger oil com- panies keep their eyes peeled for valuable avenues to increase their promising GoM portfolios. In an area where 65% of historic subsea tree award activity has been from independent oil companies, near-term demand will obvi- ously be negatively affected as the area re-adjusts. It will be vital for the GoM to maintain a universe of companies that find value in marginal fields that have his- torically made-up the bulk of developments in the region. Without this bread-and-butter development activity, there could be a permanent shift in the GoM’s development profile with fewer, but perhaps larger opportunities for oil service companies. In addition, some subsea demand has shifted to the right as key projects currently at the end of www.marinelink.com MN 29 MarineNews Yearbook Offshore • by Quest Offshore 2010
