Work-class ROV market forecast lower on weaker rates and utilisationNews // September 10, 2015
Douglas-Westwood (DW) forecasts that the market for the operation of work-class ROVs will total US$14.2 billion over the period to 2019.
According to Antoine Paillat, author of World ROV Operations Market Forecast, this represents a 19 per cent increase on the previous five-year period, however, near-term it sees some difficult conditions with weaker day rates and lower levels of utilisation for the work-class fleet.
"We expect the global ROV market to significantly contract in value terms in 2016 (-6.3 per cent) and then plateau in 2017, due to the current oil price downturn," she explained.
“We will see recovery later in the decade and this results in an overall compound annual growth rate (CAGR) of 4.3 per cent for ROV expenditure over the forecast period. For the fleet, we expect to see an additional 193 units over the period, increasing from 983 ROVs in 2014 to 1,176 in 2019.”
Research team leader and assistant editor, Hannah Lewendon, said: "The team has performed a full refresh of the market model with the latest DW offshore data and revisions to methodology, and sense-checked this through extensive consultation with industry.
"We found that regionally there were some bright spots, such as the Middle East which sees no downturn in expenditure evident and a CAGR of 6.5 per cent to 2019, although it accounts for only 10 per cent of overall spend in 2015 due to the extensive use of divers in the region. Latin America is now the largest market albeit growth levels are somewhat muted at 3.3 per cent CAGR as a result of slowdown in developments in Brazil.
“We see that drilling support accounts for some 54 per cent of the current market followed by construction support at 29 per cent. The remaining IMR market is the smallest but also the most resilient to downturns in oil price.
"Technology continues to advance, particularly in the Gulf of Mexico market where post-Macondo changes such as API Standard 53 have brought new requirements for ROV blow-out preventer intervention. This has led to a new generation of very large, heavy-duty work-class ROVs.”