SURF (subsea umbilicals, risers, and flowlines) helps connect the surface systems and subsea production. In line with this objective, SURF can be divided into two parts: umbilicals, and risers and flowlines. Newer fields as the production of oil & gas are located in deeper waters as compared to the mature fields. SURF is primarily employed in deep offshore fields.
The Asia Pacific SURF market is expected to surpass US$ 19.47 billion by the end of 2028 and exhibit a CAGR of 12.5% during the forecast period (2021 to 2028).
Increasing demand for oil and natural gas in emerging economies is driving the SURF (subsea umbilicals, risers, and flowlines) market growth in the Asia Pacific region. Increasing subsea installation has also positively impacted the SURF market. According to the International Energy Agency (IEA), in 2018, Asia Pacific’s oil demand was increased by 34.8 billion barrels/day from 34 billion barrels/day in 2017.
Increasing oil and gas exploration and production activity in deep and ultra-deep water depths has boosted the growth of the Asia Pacific SURF (subsea umbilicals, risers, and flowlines) market. According to the IEA, the spending for offshore exploration and production amounted to US$ 343 billion in 2014, an increase of 6% from 2013. Furthermore, increasing oil and gas exploration, production activities, projects, and initiatives of major players to build advanced technologies have surged the SURF market in APAC. For instance, in October 2018, Aker Solutions, an an engineering company based in Oslo, received orders from the China National Offshore Oil Corporation (CNOOC) to provide the subsea production system and umbilicals for Lingshui 17-2 gas field.
Among countries, Malaysia held the dominant position in the Asia Pacific SURF market in 2020, accounting for 24.5% market revenue share, followed by China.
Figure 1. Asia Pacific SURF Market Revenue Share (%), By Country, 2020
High capital investment and flexible oil prices is anticipated to hamper the APAC SURF market over the forecast period. Oil and gas from subsea system is transported to the host by flowlines and umbilicals control well and production equipment, which are very expensive. Divers and remotely operated vehicles are used to perform many deep-water work functions on subsea installation and maintenance.
Increasing investments by major players and augmenting oil and gas exploration and production activities in Asia Pacific are the current SURF market trends in the region. For instance, in 2018, India’s Oil and Natural Gas Corp. (ONGC), an Energy Company, awarded its largest single subsea contract to a consortium of McDermott International, Inc., Baker Hughes, a GE Company (BHGE), and L&T Hydrocarbon Engineering (LTHE), a subsidiary of Larsen & Toubro. These companies would provide ONGC with services and subsea equipment for its largest deep-water project. Moreover, ONGC contract calls for installing subsea umbilicals, risers, and flowlines (SURF) at water depths that is ranging from 984 feet to 10,500 feet.
|Base Year:||2020||Market Size in 2020:||US$ 6.22 Bn|
|Historical Data for:||2017 and 2020||Forecast Period:||2021 to 2028|
|Forecast Period 2021 to 2028 CAGR:||12.5%||2028 Value Projection:||US$ 19.47 Bn|
Aker Solutions ASA, TechnipFMC plc, Prysmian Group, Vallourec S.A., JDR Cable Systems (Holdings) Ltd., Oceaneering International, Inc., Subsea 7 S.A., Nexans Norway AS, Saipem S.p.A., McDermott International, Inc., DeepOcean Group Holding BV, Ocean Installer AS, Actuant Corporation, and Airborne Oil & Gas B.V
|Restraints & Challenges:||
Figure 2. Asia Pacific SURF Market – Opportunity Analysis
On the basis of product type, in 2020, the flowlines segment accounted for 48.6% revenue share. Subsea flowlines are the subsea pipelines used to connect a subsea wellhead with a manifold or the surface facility. Subsea flowlines carry oil and gas from the wellhead to the riser base. This has fueled the flowlines segment of APAC SURF market.
Figure 3. Asia Pacific SURF Market Revenue Share (%), By Product Type, 2020
Asia Pacific SURF Market - Impact of Coronavirus (COVID-19) Pandemic
Due to the extensive spread of the coronavirus in APAC in 2020, the energy industry faced a negative impact. Due to the rising number of deepwater and ultra-deepwater oil and gas projects in a few South-eastern Asian countries and China, the APAC region will account for the highest growth during the forecast period. The emergence of next-generation automated drilling rigs has been a driving factor influencing the growth of SURF market in APAC. Other market drivers include declining E&P cost of deepwater and ultra-deepwater oil and gas projects and the rise in new exploration policies in APAC.
Key players operating in the Asia Pacific SURF market include Aker Solutions ASA, TechnipFMC plc, Prysmian Group, Vallourec S.A., JDR Cable Systems (Holdings) Ltd., Oceaneering International, Inc., Subsea 7 S.A., Nexans Norway AS, Saipem S.p.A., McDermott International, Inc., DeepOcean Group Holding BV, Ocean Installer AS, Actuant Corporation, and Airborne Oil & Gas B.V.
SURF (subsea umbilicals, risers, and flowlines) offers a connection between the subsea production and surface systems. Umbilicals provide a vital link between the subsea production system, processing system, and surface and have no contact with the produced fluids. Flowline transports the unprocessed fluid from the subsea well to the riser, which is then transported from the riser to the surface processing system.
High oil prices have enabled investment in deep-water development and technology and marginal projects. However, exploration and development will now be affected due to the collapse in oil price, as operators aim to ensure that low costs and high margins are established in projects before approving them.
Key factors influencing the growth of the Asia Pacific SURF (subsea umbilicals, risers, and flowline) market include high investment by key players in the oil and gas production and exploration. Key players continues to see momentum on projects to develop gas for domestic consumption, and it expects India to launch the next wave of large development projects, including Blocks 98/2 and KG-D6 by ONGC and Reliance, respectively.
Moreover, key players are focusing on various strategies such as collaborations coupled with product portfolio expansion. For instance, in December 2018, Saipem, an Italian multinational oilfield services company, and Petrobel, a subsidiary company of the Egyptian General Petroleum Corporation, negotiated an offshore contract addendum for Engineering, Procurement, Construction and Installation (EPCI) activities in relation to the ‘Ramp Up to Plateau’ phase of the Zohr Field Development project situated in the Mediterranean Sea off the Egyptian coast.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.