Uproar in Ghana after president unveils his own statue    Putin hails 'courageous' Trump after election win    Israel passes law to deport relatives of attackers, including citizens    Monkey mayhem in South Carolina after 43 primates escape research facility    Russian anti-war teenager faces five years in jail after failed appeal    SR 3.95 million fines for 3 employees of a company and 6-month jail for one for violating Capital Market Law    Qassim emir launches 52 health projects costing a total of SR456 million    BD and INS partner to elevate standards of infusion care in MENAT    Dubai Design Week launches its 10th edition, celebrating creativity and innovation    GASTAT: Passengers of public transport bus and train soar 176% and 33% respectively in 2023    Fakeeh Care Group reports 9M-2024 net profit of SR195.3 million, up 49% y-o-y driven by solid revenue growth and robust profitability    HRT does not impact life expectancy — UK health body    Liam Payne's body to be flown back to the UK    Suspect arrested for banking fraud totaling SR493 million as Nazaha pursues corruption charges    Arab leaders and heads of state congratulate US President-elect Donald Trump    Neymar suffers muscle tear, out for 4-6 weeks    Crown Prince hails Saudi medical team that performed world's first fully robotic heart transplant    Al Nassr secures 5-1 victory over Al Ain to edge closer to knockout stage    Al Ahli extends perfect start with 5-1 victory over Al Shorta    Mitrovic's hat-trick leads Al Hilal to 3-0 victory over Esteghlal    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



COVID-19 and subsea: Demand for umbilicals set for multiyear blow
Published in The Saudi Gazette on 06 - 05 - 2020

The COVID-19 pandemic and its devastating effect on global energy investments is set to damage subsea purchases, with demand for umbilical lines expected to fall by 32% to just 713 kilometers (km) of lines in 2020, down from 1,041 km last year, a Rystad Energy impact analysis reveals.
Umbilical demand will not match or exceed 2019 levels until after 2023, our forecasts show, despite definite cost savings in materials. To put these numbers into context, before the pandemic demand for umbilicals was due to slightly decrease this year compared to 2019, but to rebound and exceed last year's levels from 2021 onwards.
Without accounting for the negative impact of a global economic downturn, we see a cost reduction of approximately 5% taking place from 2020 to 2022 within the umbilicals segment. If on the other hand, both the global recession and oil and gas industry downturn take place simultaneously, our outlook will change drastically. We then estimate a cost reduction of almost 14% over the same time frame.
"This will provide umbilical manufacturers short-term relief regarding their own costs as material prices fall, allowing them to maintain production volumes and recover some of their margins despite cutting their own prices. However, this short-term relief may not last long as the global economy recovers from the Covid-19 pandemic," said Rystad Energy oilfield service analyst Henrik Fiskadal.
The materials most commonly found in the manufacturing of umbilicals are high-grade stainless steel, carbon steel armor wire, hydraulic hoses, power cables, fiber optic cables and thermoplastic resins. In addition to the materials, engineering labor is the next largest cost input involved in the manufacturing of umbilicals. Therefore, the more complicated and unique is the design, the more strenuous and costly the fabrication and installation processes.
Prices for materials have remained relatively flat since 2014, whilst the service price for SURF equipment has fallen significantly. This illustrates the large cost savings realized by operators since 2014 and supports our belief that operators will not be able to enforce the same cost cuts from 2020 onwards, having exhausted most of the cost cutting potential in the years following the 2014 downturn.
Should we see a global recession, materials such as high-grade stainless steel may decrease significantly in price. However, when the global economy rebounds from COVID-19, material pricing could increase before the oil and gas industry is ready to accept higher prices for umbilicals.
As a result, in addition to our 2020 demand forecast downgrade, we have also revised our umbilicals demand expectations for 2021-2023. In 2021, demand is expected to reach 798 km, growing to 819 km the following year and to 979 km in 2023. — Rystad Energy


Clic here to read the story from its source.