Southeast Asia Bullish on OFS Market
Offshore project sanctions in Southeast Asia could lift greenfield investments in the oilfield services market by nearly 70 percent in 2020, said Rystad Energy.
According to Norwegian energy research firm, the growth will be driven by a handful of new mega-projects across Malaysia, Myanmar and Vietnam, according to the latest tally of project commitments in Southeast Asia by the Norwegian energy research and consulting firm.
New final investment decisions (FIDs) in 2021 are expected to sound the starting gun for big contract awards in Vietnam, Indonesia and even politically-troubled Brunei.
“We anticipate that operators will aim to place most of the associated contracts within their domestic markets, which will be welcome news for local players like Sapura Energy, MMC Oil & Gas, MMHE and many of the smaller yards,” commented Chinmayi Teggi, an analyst on Rystad Energy’s oilfield service solutions (OFS) team.
For suppliers, established local yards are set to make a splash, along with major international players. Fixed platforms and floating units are expected to bring in more than $2.5 billion in equipment purchase commitments and over $4 billion for the construction and installation of platforms and vessels. This will likely be driven by large developments such as Shwe Yee Htun in Myanmar, Kelidang off Brunei, Ca Voi Xanh in Vietnamese waters and Jerun off Sarawak, a Malaysian state on Borneo.
Another sector making waves in Southeast Asia is the FPSO market, with regional players such as MISC, Yinson and Bumi Armada positioning themselves for awards on the Limbayong, Ubon and Nam Du projects, among others. Given the stringent local content requirements in the region, the related topside and hull fabrication jobs are expected to remain on home soil.
“All in all, the subsea market could see greenfield commitments worth more than $1.3 billion over the next two years, nearly double the $700 million in subsea commitments in 2019,” added Teggi.