“In 2011, demand for offshore wind turbines operations & maintenance services totalled $52.5 billion, having grown at a compound rate of 6.3 percent over the past five years,” said Jenny Harbour, author of the report. “Over the next five years, we expect a greater compound growth of 8 percent, as the market recovers from the effects of the global downturn of 2008-2009. This will be driven by a combination of high oil prices, buoyant offshore development activity, and rampant price inflation for equipment and services.”
O&M markets are considerably less vulnerable to downturn than their capital-led counterparts. While global offshore drilling activity dropped by an estimated 14 percent during 2008-2009, total offshore production (the principal driver for all operational activity) grew by 1 percent. The global offshore O&M market dropped, over the same period, but only by 0.04 percent, despite widespread price deflation for equipment and services.
Production services dominate O&M market expenditure. Over the 2007-2011 period, demand for production-related services accounted for 44 percent of global O&M demand. These services are directly associated with production levels from offshore facilities and are intensified as an oil or gas reservoir matures and requires additional effort to sustain production. The inevitable maturing of offshore fields will drive compound growth of 7.4 percent in the production services sector, as operators struggle to come to terms with decreasing down-hole pressure and increasing water cuts.
”The Historical dominance of mature western basins is to be challenged in the next five years,” said Douglas-Westwood’s Research Manager, Rod Westwood. “From 2007 to 2011, 40 percent of global demand was accounted for by Western Europe and North America. Although Douglas-Westwood expects market growth in all regions (despite the UK and RoWE regions facing terminal production decline), their share of global demand over the forecast period is expected to drop to 34 percent. This shift will be driven by a combination of increasing offshore production in regions such as the Middle East and the movement towards deepwater in less mature regions such as Africa and Latin America.”