The North America offshore helicopter services market is expected to register a CAGR of more than 2% during 2020–2025. Factors, such as rising deep-water offshore development activity and improved viability of offshore oil and gas projects, are expected to be major drivers of the market. Also, advancement in technology, leading to an increase in efficiency and reliability of modern helicopters, has been a significant factor for the growth of the North America offshore helicopter services market. However, competition from less expensive crew transfer vessels hampered the growth of the market.
- The oil and gas industry sector is expected to dominate the market during the forecast period, owing to factors like increasing offshore exploration and production activity to compensate for declining onshore oil and gas fields.
- The offshore wind industry is expected to provide an excellent opportunity for the North America offshore helicopter market during the forecast period. With the growth in offshore wind power generation, there arises the need for transportation to offshore structures. This requirement is being increasingly and reliably fulfilled by helicopters. Unlike the earlier offshore wind farms that had easier access to boats, the newly built wind farms are located farther, thus making helicopters a viable option for such transportation requirements.
- The United States is expected to dominate the market, over rising offshore oil and gas exploration and production. The country accounts for over 15% of global oil production, amounting to 669.4 million metric ton in 2018, which is the largest in the region. A significant quantity of this oil production comes from the Gulf of Mexico offshore oil fields.
Key Market Trends
The Oil and Gas Industry Sector to dominate the Market
- The oil and gas industry dominated the market in the past years and is expected to continue to do the same during the forecast period as well. The industry is the most popular source of revenue for the offshore helicopter sector in the region. Rising offshore exploration activities in countries, like the United States and Canada, are expected to help grow the market in the forecast period.
- Offshore projects are becoming more competitive, owing to the improving efficiencies and tightening of the supply chain, which led to the declining costs of offshore drilling. For example, prior to 2014, a deep-water well in the Gulf of Mexico costed about USD 200 million to drill. As of 2018, drilling a deep-water well in the same region costs between USD 10-50 million.
- As per EIA, the production in Gulf of Mexico is expected to average 1.9 million b/d in 2019, making this region the second-largest contributor to crude oil production growth from 2018 to 2019. The forecast growth is driven by 14 new fields brought online in 2018 and 9 new fields expected to come online in 2019. These 23 fields, collectively, are expected to contribute more than 200,000 b/d of the total 1.9 million b/d of GOM production in 2019.
- In recent years, the Government of Nova Scotia, Canada, actively promoted the province’s offshore oil and gas sector, estimating a potential resource of 121 trillion cubic feet of gas and 8 billion barrels of oil. Moreover, in 2018, the Nova Scotia government announced its plans to invest USD 11.8 million for offshore research, over the next four years, to encourage offshore oil exploration in the region.
- Therefore, the aforementioned factors are expected to drive the market in the forecast period.
The United States to Dominate the Market
- The United States dominated the offshore helicopter market in 2019 in the region and is expected to continue its dominance in the coming years as well. The country has been very active in offshore exploration in recent years, and the government developed various favorable policies to help oil and gas companies develop offshore prospects.
- In terms of policy support, 2017 witnessed some positive developments. The tax overhaul plan drastically increased the fiscal competitiveness of offshore projects in the Gulf of Mexico, relative to other offshore basins. Additionally, the Trump administration announced that it would lift the ban on offshore drilling, off the coasts of Florida and California.
- In order to maintain offshore production, the exploration and development activity is moving toward deeper waters, where oil and gas reserves have not been exploited. This trend is expected to drive the demand for medium and heavy helicopters, while the demand for small helicopters for the oil and gas industry is expected to decline during the forecast period.
- In January 2018, there existed only one operating offshore wind power plant in the country, with only 30 MW of installed capacity. The falling cost of wind turbines, and thereby reduction in overall project cost, is projected to boost the growth of the offshore wind power segment in the coming years. According to AWEA, by 2023, the US offshore wind sector is expected to scale up from a single, 30-megawatt project to six offshore wind projects totaling 2,101 megawatts.
- Therefore, the rising offshore oil and gas development and an increasing number of offshore wind farms in the country are expected to help grow the offshore helicopter market in the country.
The North American offshore helicopter services market is moderately concentrated. Some of the major companies are Bristow Group Inc., Era Group Inc. (ERA), Cougar Helicopters Inc., CHC Group Ltd, and Textron Inc., among others.
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