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Thinking outside the North Sea
When is global domination not global domination?
February 2011
Page 2
Protected by Copyright © 2011 ODS-Petrodata
February 14, 2011
ODS-Petrodata is recognised as the leading provider of market
intelligence to the global oil and gas industry
ODS-Petrodata is an independent
market intelligence company
130+ employees
- market reporters, specialists and
analysts
- Houston, Aberdeen, Oslo, Singapore
and Dubai
Our knowledge base stretches from
pre-exploration through field
abandonment
- Well Services, Field Development,
LNG, Onshore Production and
Downstream, as well as Offshore
Seismic, Drilling and Marine
Operations
News I Databases I Consulting
Page 3
Protected by Copyright © 2011 ODS-Petrodata
February 14, 2011
Thinking outside the North Sea
The North Sea is still the key region for subsea work
But with subsea installation competition increasing, where else can
contractors look?
Three vessel types:
- Diving support (DP 2+)
- ROV support (DP 2+)
- Multiservice (DP 2+)
Page 4
Protected by Copyright © 2011 ODS-Petrodata
February 14, 2011
Rumours of the North Sea’s decline are exaggerated…
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2007 2008 2009 2010
Ve
sse
l Da
ys
Subsea Vessel Days By Region (2007-2010)
South America
Russia & Caspian
North America
Med. & Middle East
Europe
Central America
Asia-Pacific
Africa
Europe
Protected by Copyright (c) 1986-2011 ODS-Petrodata Ltd. Source: ODS-Petrodata, www.constructionvesselbase.com, January 2011
31% 26% 22% 23%
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Protected by Copyright © 2011 ODS-Petrodata
February 14, 2011
…but a smaller share of an expanding global market
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2011 2012 2013 2014
Ve
sse
l Da
ys
Subsea Vessel Days By Region (2011-2014)
South America
Russia & Caspian
North America
Med. & Middle East
Europe
Central America
Asia-Pacific
Africa
Europe
Protected by Copyright (c) 1986-2011 ODS-Petrodata Ltd. Source: ODS-Petrodata, www.constructionvesselbase.com, January 2011
27%26%
25% 24%
For more information please contact your ODS-Petrodata account
manager
Page 6
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February 14, 2011
Supply has increased much faster over the same period
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2007 2008 2009 2010
Ve
sse
l Da
ys
Subsea Vessel Supply By Region (2007-2010)
Africa
Asia-Pacific
Central America
Europe
Med. & Middle East
North America
Russia & Caspian
South America
Protected by Copyright (c) 1986-2011 ODS-Petrodata Ltd. Source: ODS-Petrodata, www.constructionvesselbase.com, February 2011
Page 7
Protected by Copyright © 2011 ODS-Petrodata
February 14, 2011
European utilisation is flattening after downturn
40
50
60
70
80
90
100
2007 2008 2009 2010
Utilisa
tio
n %
Subsea Vessel Utilisation By Region (2007-2010)
Africa
Asia-Pacific
Central America
Europe
Med. & Middle East
North America
Russia & Caspian
South America
Protected by Copyright (c) 1986-2011 ODS-Petrodata Ltd. Source: ODS-Petrodata, www.constructionvesselbase.com, February 2011
Page 8
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February 14, 2011
“Big Three” dominate European subsea vessels market…
Subsea 731%
Technip15%
Trico/DeepOcean/CTC13%
Others41%
Subsea Vessel Market Shares
Protected by Copyright (c) 1986-2011 ODS-Petrodata Ltd. Source: ODS-Petrodata, www.constructionvesselbase.com, January 2011
(Europe 2007-2010)
Page 9
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February 14, 2011
…but this domination is not worldwide
Subsea 7: 17%
Technip: 5%
Regional Subsea Vessels Market Share In Vessel Days 2007-2010
Trico: 1%
Subsea 7: 3%
Technip: 12%
Trico: 5%
Subsea 7: 2%
Technip: 3%
Trico: 10%
Subsea 7: 31%
Technip: 14%
Trico:13%
Subsea 7: 1%
Technip: 6%
Trico: 7%
Subsea 7: 3%
Technip: 3%
Trico: 0%
Subsea 7: 0%
Technip: 0%
Trico: 0%
Subsea 7: 27%
Technip: 6%
Trico: 1%
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February 14, 2011
Most markets are dominated by regional players
Subsea Vessel Regional Market Shares (2007-2010)
Africa Asia-
PacificCentral
America Europe
Med. &
Middle
East
North
America Ru
ss.
&
Casp
.
South
America
50%
0%100%50%0%
100%
Other
Maersk Supply
Service
Saipem
SBM
Subsea 7
Bourbon
Other
Allied Marine
Hallin Marine
TSMarine
DOF Subsea
Technip
Other
MMM
Oceanografia
Condux
Trico
Cotemar
Other
Bibby Offshore
DOF Subsea
Trico
Technip
Subsea 7
Other
Technip
Trico
Qatar
Subsea
Algosaibi
Saipem
Other
Saipem
Global Industries
Veolia Environmental
Services
Algosaibi
Oceaneering
ND
OF
S
OC
AR
Other
Toisa
Fugro
DOF Subsea
Sealion
Subsea
7
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February 14, 2011
Why the gaps in global coverage?
Asia-Pacific
- Shallow and benign waters. DP vessels achieve higher rates elsewhere
Central America
- PEMEX favours Mexican contractors to meet local content requirements
- Generally shallow waters in Mexican Gulf of Mexico – very low day rates
North America
- The Jones Act – US-built and US-flagged vessels owned and crewed by US
citizens
South America
- Regulatory hurdles in Brazil for foreign companies seeking to bid
- Important to establish a relationship with Petrobras
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February 14, 2011
How can these doors be opened?
Asia-Pacific
- Opportunity is there if contractors are willing to accept lower day rates
- Deeper waters offshore Australia will be key area going forward
Central America
- Hire Mexican workers for vessels, and also accept lower day rates
North America
- Toughest regional market for a foreign contractor to enter
- Charter vessels and crew from US-based companies
South America
- Winning long-term contracts with Petrobras is key to becoming established
- Partnering a local company to bid for work
Page 13
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February 14, 2011
Another option – mergers and acquisitions
ODS-Petrodata forecasts a busy year for mergers and acquisitions
At least five big deals (>USD 1 billion each) in 2011
Three or more of these deals will involve offshore or services
companies
Technip acquired Subocean January 2011
2010 paved the way
- Acergy/Subsea 7
- Ezra/Aker Marine Contractors
- Fugro/Riise
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February 14, 2011
Which companies are potential takeover targets?
Cal Dive Global IndustriesTrico Marine/
DeepOcean / CTC
Key Subsea Regions
Asia-Pacific
Med. & Middle East
North America
Med. & Middle East
North America
Asia-Pacific
Central America
Europe
Med. & Middle East
Subsea Vessels
Managed
1 Diving Support
1 Multiservice
2 Diving Support
2 ROV Support
12 ROV Support
1 Multiservice
2 ROV Support
Newbuilds
Vessel Utilisation 2010 40% 64% 60%
Net Profit Margin 2009 9% 8% -23%
Backlog Q3 2010 USD 233.4 million USD 274.5 million -
Vessel Data Source: ODS-Petrodata, www.constructionvesselbase.com, February 2, 2011
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February 14, 2011
Buying individual vessels may be another option
One Subsea 7 diving support vessel to be divested
- North Sea competition concerns
SBM may be considering selling Dynamic Installer
- Africa entry point for new contractor?
Break-up of Trico fleet could continue
- Trico Sabre and Trico Star already sold to Ezra
Vessels may be available at knockdown prices
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February 14, 2011
Summary – A future beyond the North Sea?
The North Sea is still the world’s largest subsea region
- Typically between one third and one quarter of the global market each year
But its share of an expanding global market is shrinking
- Asia-Pacific a particularly strong market for diving work
Competition is fiercer in the North Sea than anywhere else
- 50 of the 126 global contractors operate in the North Sea
Contractors seeking new horizons face varying hurdles
- In a tight but expanding market, few will be able to rest on their laurels
The North Sea is key, but the potential rewards elsewhere are huge
Page 17
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February 14, 2011
Contact information
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Dubai, UAE
Office Address:
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Dubai
United Arab Emirates
Tel: +971 4 3117118
Fax: +971 4 3326136
Mark Rae
Senior Market Analyst
www.ods-petrodata.com
www.msspoint.com
www.constructionvesselbase.com
