The Latin America offshore support vessel market is expected to register a CAGR of less than 2% during 2020 - 2025. Factors, such as an increase in offshore oil and gas exploration and wind farm projects in the Atlantica Ocean, are likely to drive the Latin American offshore support vessels market. However, stringent regulations by the governments and heavy fine for any issue related to the environment is likely to have some restrain on the Latin American offshore support vessels market.
- The Platform Supply Vessels (PSVs), because of its ability to transfer offshore equipment, held a significant market share, in 2018, and it is likely to dominate the market during the forecast period.
- Increasing exploration and development activities in the recently found deep-water basins, such as Santos Basin and Campos Basin, are likely to create many opportunities for the Latin America offshore support market in the future.
- Brazil, due to its highest number of deep-water activities in the Atlantic Ocean, is expected to see the significant market growth during the forecast period
Key Market Trends
Platform Supply Vessels (PSVs) Segment to Dominate the Market
- Platform Supply Vessels (PSVs) are the offshore vessels used for transferring equipment, crew, and other goods to the offshore drilling platform. In 2014, after falling in oil prices, the offshore support vessel market slowed down, but as the oil prices began to rise, the offshore support vessel market also gained its pace.
- Libra oil field in Santos Basin in Brazil is an ultra-deep-water basin, is the largest oil field in Brazil, is under exploration and development phase, and is expected to complete in 2021. The exploration and development phase will be requiring huge equipment that can be delivered by platform supply vessels (PSVs).
- In Guyana, Exxon Mobil and its partner, Hess Corp., in February 2019, announced 12 discoveries in the massive Stabroek Block. The two companies announced their latest findings at Tilapia-1 and Haimara-1 in the southeast portion of Stabroek. These discoveries and the development of the fields will require platform supply vessels (PSVs) for delivering the crew and equipment to the sites.
- In February 2020, Eni SpA, an Italian company exploring in offshore Mexico, announced its new discovery at Saasken block in Sureste Basin in the Gulf of Mexico. From preliminary exploration, the block contains 200 to 300 million barrels of oil and can produce up to 10000 barrels per day.
- Hence, the above points indicate that PSVs is expected to dominate the Latin America offshore support vessels market during the forecast period.
Brazil to Dominate the Market
- The deep-water and ultra-deep-water activities directly influence the offshore support vessels market. After oil prices fell in 2014, many countries shifted towards onshore projects. Still, it turned out that the return investment period of onshore projects is 10 to 15 years. So, Brazil started deep-water and ultra-deep-water explorations, which are more profitable, having a return investment period of 5 to 6 years.
- According to the National Agency of Petroleum, Natural Gas, and Biofuels (ANP), in 2019, out of the total production in the country, 93% comes from offshore, and only 7 % are from the onshore. Further upcoming projects in the deepwater are likely to increase Brazil's share in Latin America offshore support vessels market.
- In 2018, Brazil was the 10th largest producer of oil and gas in the world, the largest producer in South America and the seventh-largest oil products consumer in the world. Most of the oil and gas are produced offshore.
- Petróleo Brasileiro SA (Petrobras)in 2019 has awarded MODEC to install the fifth Floating, Production, and Storage Offshore (FPSO) Unit in Buzios field for its development. These development activities are likely to show the significance of Brazil in the Latin America offshore support vessels market.
- Equinor ASA is in the second phase of the development of its Peregrino Oil field in Brazil offshore. Equinor is expecting to invest USD 3.5 billion on the project, which will start production by the end of 2020. Development of the field is expected to expand the Brazilian offshore activities.
- Therefore, owing to the above points, Brazil, with most of the activities in the offshore deepwater, is likely to see significant growth in the Latin American offshore support vessels market during the forecast period.
The Latin American offshore support vessels market is moderately consolidated. Some of the key players in this market include Edison Chouest Offshore, Tidewater Inc., GulfMark Offshore, Inc., SEACOR Marine Holdings Inc., and Bourbon Corp.
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