Global subsea spending will reach $42 billion by 2027

The subsea market segment, which includes players involved in production and processing systems such as risers and subsea umbilical flowlines (SURFs), trees, wells, manifolds and other components, is poised to experience significant capital inflow. Given the increase in operator spending on equipment and installation services, Rystad Energy projects a compound annual growth rate (CAGR) of 10% from 2024 to 2027, with total spending expected to exceed $42 billion by the end of this period.

Investment activity was particularly robust in regions such as South America and Europe, where major projects are making significant progress and attracting new investment. Brazil in particular remains a focal point due to its vast pre-salt reserves, which generates strong demand for subsea and SURF equipment. Anticipated spending in Brazil is set to grow 18% year-over-year to $6 billion in 2024. Meanwhile, in Europe, Norway is experiencing a resurgence of activity fueled by favorable market conditions and technological advances such as fi Subsea Hydraulic Unit, which is cost-effective and replaces 100 tons of deck equipment and SWIFT™, a remotely operated tube suspension tool that enables umbilical-less operations, reducing the need for heavy equipment on the side superior.

Cumulative spending is expected to reach $32 billion by the end of 2024, representing an increase of 6.5% over the previous year. This growth is driven by strong activity in services, equipment and SURF, largely fueled by significant investments in deep and ultra-deepwater projects. The subsea sector is also expanding beyond traditional oil and gas applications. The push for carbon capture and storage (CCS) is creating new opportunities for suppliers and driving research and development in this emerging market. As a result, suppliers are leading the way in developing more efficient subsea production systems to be widely adopted.

The subsea market has rebounded strongly from the impact of Covid-19, which caused a significant 20% drop in spending in 2020. By 2021, the industry has started to recover, with spending increasing by 5% to reach $23 billion . Looking ahead, we anticipate steady growth in the subsea sector, fueled by advances in deepwater exploration and carbon capture and storage (CCS). This recovery highlights the resilience of the industry and suggests a promising trajectory of consistent progress.

Sanwari Mahajan, Analyst, Supply Chain Research, Rystad Energy

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Deepwater developments will dominate the sector, accounting for 45% of the market in 2024-2028. Significant green projects include Barracuda Revitalization in Brazil, Johan Castberg and Breidablikk in Norway and Golfinho in Mozambique. Key disadvantaged initiatives include Balder Future, Gullfaks South and Schiehallion in Norway and the UK.

Deepwater projects, led by major floating production, storage and offloading (FPSO) initiatives in Brazil and Guyana, will capture 35% of the market. South America is expected to lead globally with 500 subsea tree installations in the next five years. Upcoming greenfield projects in ultra-deep water (over 1,500 meters) include Yellowtail, Tilapia and Redtail in Guyana, along with Buzios VIII, Buzios IX, Sepia and Atapu in Brazil. Notable disadvantaged projects are Trion in Mexico, Egina in Nigeria and Argos (Mad Dog Phase 2) in the US.

The subsea sector has made notable progress since 2022 amid increased sanctioning activity for deepwater and ultra-deepwater developments. In that year alone, deepwater projects saw spending of $12 billion, with Europe contributing 28% of that total. Between 2020 and 2023, Norway led globally by installing 200 underwater trees out of a total of 600 placed in deep water (between 125 and 1,500 meters). During the same period, Norway also installed 1,400 kilometers of deep-water SURF, surpassing Brazil’s 1,200 kilometers.

In 2024, ExxonMobil’s expanded operations will significantly boost subsea tree installations. After Equinor, which installed 17% of the total subsea trees this year, ExxonMobil is expected to contribute 12%, with the main focus on Guyana. This growth is driven by major projects such as Yellowtail, Redtail and Payara, highlighting Guyana’s growing prominence in the subsea sector amid tightening sanctions and a shift towards more sustainable and efficient operations.

In the SURF sector, global installations are expected to reach 3,500 kilometers in 2024. Brazil is expected to account for 22% of this total, while the US and Angola are expected to contribute 15% and 10% respectively. The installation rate is anticipated to grow at a compound annual growth rate (CAGR) of 15% from 2024 to 2028, with Brazil, Norway, the US, the United Kingdom, and Angola being the major markets.

Looking ahead to suppliers and operators poised to shape the market in the coming years, TechnipFMC is expected to supply approximately 400 subsea shafts between 2024 and 2029. Of this total, 35% is estimated for ExxonMobil’s development in Guyana and 22% for Petrobras in Brazil. Simultaneously, OneSubsea is expected to deliver nearly 270 trees over the same period, with around 40% slated for Brazil. Aker Solutions (now OneSubsea) is expected to supply 150 trees, with 80% allocated to Norway.

Petrobras remains a dominant operator, particularly in South America, where it has invested heavily in pre-salt development. In Europe, Equinor and Aker BP stand out for their extensive subsea portfolios, with significant tie-in projects on the Norwegian continental shelf underscoring their strategic importance. In the US, Shell and BP are leaders with substantial investments in deepwater and ultradeepwater exploration and production. TotalEnergies has a strong position in Africa, particularly in Angola and Nigeria.

Of Rystad Energy

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