Subsea Umbilical - Whats new in Latin American market?
- The largest oil & gas markets for subsea umbilicals are South America & the Gulf of Mexico representing around 30% of the global market, followed by the North Sea and the Asia Pacific.
- The supply market of umbilicals is geographically connected to the end markets, with relatively healthy competition. Most of the manufacturing is located in Europe and the USA / South America.
- Demand for subsea umbilical in the oil & gas industry is not expected to fully recover until 2023. The demand for subsea cables and umbilical from offshore wind farms is expected to significantly dominate in the years to come and may account for more than half the total demand.
- Expected growth in deep-water projects (floaters and subsea tiebacks) mainly in Brazil will help the demand to rebound
- As of now, Brazil is the largest market where opportunities exist, with many tenders floated by Petrobras. Markets such as the Asia Pacific and the Middle East are slowly picking up as well.
- In Brazil, Prysmian was poised to win a recent tender for steel tube umbilical, outperforming Marine Production Systems do Brasil (Oceaneering) and MFX do Brasil. In addition, Oceaneering’s proposal qualified in lot 1 for up to 545km of subsea electro-hydraulic umbilical at c. $ 90.6 million. MFX is a frontrunner for Lot 2 with almost $ 75 million (Source: Bnamericas)
- Recently, TechnipFMC was awarded the 3rd contract in a row to supply subsea umbilicals, risers and flowlines to Petrobras for its Mero field
- The cost of raw materials is skyrocketing, after a long period of stagnation due to COVID 19. Stainless steel (being a large component of subsea umbilical) and its input costs such as Nickel and Molybdenum are going up. In the US, stainless steel prices reached its highest levels since July 2018
- Prices for stainless steel are expected to continue its increase and come back to a 9-year high (source: hellenicshippingnews.com)