Subsea engineering, procurement and construction (EPC) spend in Western Europe in 2022 is projected to reach its highest level in almost a decade.
Analysts at Westwood Global Energy Group say the North Sea will form a “significant part” of that as operators look to cash in on a return to healthy oil and gas prices.
Brent crude topped $110 a barrel on Wednesday, stoked by concerns about global energy security following Russia’s invasion of Ukraine.
It came less than a week after the benchmark broke the $100 a barrel mark for the first time since 2014.
Meanwhile, European natural gas surged as much as 60% to a new record on supply fears.
It paints a rosier picture for the oil and gas sector, which has had to endure dwindling commodity prices in recent years.
And with more cash in their pockets, operators are beginning to give projects the green light again.
Daniel Sidwell, an analyst on the offshore energy services team at Westwood Global, said: “At a global level, with the oil price where it is, we’re seeing generally positive sentiment in the subsea market.
“In line with that we’re observing higher levels of activity already in 2022, compared to 2021, with more active tenders and expressions of interest.
“Looking at Western Europe specifically, in terms of subsea EPC spend this year we expect it to be the highest since 2013.
“The North Sea will be a significant part of that spend – we anticipate the award of 75 subsea trees in 2022 for projects in the region.”
© Supplied by Aker BPThe two largest operators contributing to that Westwood Global’s subsea tree prediction are Equinor (OSLO: EQNR) and Aker BP.
Equinor submitted an environmental impact assessment for the Wisting field, located around 192 miles from the Norwegian mainland, earlier this year.
A total of 31 subsea trees are associated with the development, according to Westwood Global – contracts for those are expected to be awarded this year.
A significant proportion of North Sea subsea tree demand, a good gauge of offshore activity, will also come from Aker BP’s North of Alvheim (NOAKA) scheme.
Part of a larger project that Aker BP (OSLO: AKRBP) is working on with Equinor, awards for 14 subsea trees for the development are also expected this year.
The Alvheim field is located in the Norwegian part of the central North Sea, adjacent to the UK sector.