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Subsea Capex to Surge: Which Companies Will Gain the Most?
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Rystad Energy’s latest report offers an optimistic outlook for the global subsea market, projecting capital investments to surpass $42 billion by 2027. This growth is anticipated to be fueled by increasing operator spending on subsea equipment and installation services, with a compound annual growth rate (‘CAGR’) of 10% expected from 2024 to 2027. The energy consulting firm’s figures highlight the expanding importance of the subsea sector, especially for companies focused on deepwater and ultra-deepwater operations.
Deepwater Projects to Lead Subsea Market Expansion
Deepwater projects are set to dominate the subsea market, expected to represent 45% of the segment from 2024 to 2028. Major initiatives like Brazil’s Barracuda Revitalization and Norway’s Johan Castberg underscore the global reach and strategic significance of these developments. South America, particularly Brazil, is notable for a projected 18% increase in subsea equipment spending, reaching $6 billion in 2024. Europe is also experiencing a revival, with Norway at the forefront, driven by technological innovations that boost operational efficiency.
Ultra-Deepwater Initiatives Not Far Behind
Ultra-deepwater developments, especially those utilizing Floating Production, Storage, and Offloading systems in Brazil and Guyana, are poised to secure 35% of the market. These regions are expected to lead in subsea installations, with Brazil and Guyana projected to contribute significantly to the 500 subsea tree installations forecasted globally over the next five years. This underscores the strategic value of ultra-deepwater expertise and the opportunities it creates for companies specializing in subsea operations.
Opportunities Beyond Oil & Gas
The subsea sector is growing not only in capital investment but also in its scope of operations. According to Rystad’s report, the drive for Carbon Capture and Storage (“CCS”) is opening new avenues within the subsea market, spurring advancements in more efficient production systems. This trend highlights the necessity for companies to innovate and evolve, positioning themselves in both traditional oil and gas markets and emerging segments like CCS.
Which Companies Will Benefit?
For investors, the significance of Rystad’s report lies in its implications for subsea-focused companies. Firms with strong expertise in deepwater and ultra-deepwater projects, such as TechnipFMC (FTI - Free Report) and SLB (SLB - Free Report) , are well-positioned to benefit from the projected capital influx. Their involvement in key projects across Brazil, Norway and Guyana places them at the forefront of this growth trajectory.
TechnipFMC: TechnipFMC excels in optimizing subsea fields from concept to delivery, driven by top-tier products, systems and expertise. Its Subsea 2.0 platform reduces costs and lead times through modular, standardized designs that simplify installation and enhance field performance. With cutting-edge technologies and efficient ROVs, TechnipFMC continues to improve subsea operations, helping operators save time and money. The Zacks Rank #3 (Hold) company is a major supplier to ExxonMobil’s (XOM - Free Report) subsea projects in Guyana and Petrobras’ (PBR - Free Report) in Brazil.
SLB: SLB, Aker Solutions, and Subsea 7 (SUBCY - Free Report) have formed OneSubsea, a joint venture focused on transforming subsea production economics and reducing emissions. With SLB holding a 70% stake, OneSubsea leverages deep reservoir expertise, extensive system design knowledge, and a proven subsea technology portfolio. The venture offers world-class manufacturing capabilities and unique pore-to-process integration, positioning itself as a leader in subsea innovation and solutions.
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Subsea Capex to Surge: Which Companies Will Gain the Most?
Rystad Energy’s latest report offers an optimistic outlook for the global subsea market, projecting capital investments to surpass $42 billion by 2027. This growth is anticipated to be fueled by increasing operator spending on subsea equipment and installation services, with a compound annual growth rate (‘CAGR’) of 10% expected from 2024 to 2027. The energy consulting firm’s figures highlight the expanding importance of the subsea sector, especially for companies focused on deepwater and ultra-deepwater operations.
Deepwater Projects to Lead Subsea Market Expansion
Deepwater projects are set to dominate the subsea market, expected to represent 45% of the segment from 2024 to 2028. Major initiatives like Brazil’s Barracuda Revitalization and Norway’s Johan Castberg underscore the global reach and strategic significance of these developments. South America, particularly Brazil, is notable for a projected 18% increase in subsea equipment spending, reaching $6 billion in 2024. Europe is also experiencing a revival, with Norway at the forefront, driven by technological innovations that boost operational efficiency.
Ultra-Deepwater Initiatives Not Far Behind
Ultra-deepwater developments, especially those utilizing Floating Production, Storage, and Offloading systems in Brazil and Guyana, are poised to secure 35% of the market. These regions are expected to lead in subsea installations, with Brazil and Guyana projected to contribute significantly to the 500 subsea tree installations forecasted globally over the next five years. This underscores the strategic value of ultra-deepwater expertise and the opportunities it creates for companies specializing in subsea operations.
Opportunities Beyond Oil & Gas
The subsea sector is growing not only in capital investment but also in its scope of operations. According to Rystad’s report, the drive for Carbon Capture and Storage (“CCS”) is opening new avenues within the subsea market, spurring advancements in more efficient production systems. This trend highlights the necessity for companies to innovate and evolve, positioning themselves in both traditional oil and gas markets and emerging segments like CCS.
Which Companies Will Benefit?
For investors, the significance of Rystad’s report lies in its implications for subsea-focused companies. Firms with strong expertise in deepwater and ultra-deepwater projects, such as TechnipFMC (FTI - Free Report) and SLB (SLB - Free Report) , are well-positioned to benefit from the projected capital influx. Their involvement in key projects across Brazil, Norway and Guyana places them at the forefront of this growth trajectory.
TechnipFMC: TechnipFMC excels in optimizing subsea fields from concept to delivery, driven by top-tier products, systems and expertise. Its Subsea 2.0 platform reduces costs and lead times through modular, standardized designs that simplify installation and enhance field performance. With cutting-edge technologies and efficient ROVs, TechnipFMC continues to improve subsea operations, helping operators save time and money. The Zacks Rank #3 (Hold) company is a major supplier to ExxonMobil’s (XOM - Free Report) subsea projects in Guyana and Petrobras’ (PBR - Free Report) in Brazil.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SLB: SLB, Aker Solutions, and Subsea 7 (SUBCY - Free Report) have formed OneSubsea, a joint venture focused on transforming subsea production economics and reducing emissions. With SLB holding a 70% stake, OneSubsea leverages deep reservoir expertise, extensive system design knowledge, and a proven subsea technology portfolio. The venture offers world-class manufacturing capabilities and unique pore-to-process integration, positioning itself as a leader in subsea innovation and solutions.