New issue of GMAP Maritime and Offshore newsletter Subsea

Early this year, the world was hit by a pandemic - COVID-19

The Corona virus clearly has a huge global impact, especially by affecting the health of millions of people and the loss of life. The economic impact is also enormous: small and large businesses are going through bad times, entire sectors are at a standstill, tourism is declining, and stock markets are suffering because of the fear of a second wave of corona attacks.

The shipping industry has also experienced drastic changes in recent months. Container ships cancelled numerous sailings, bulk transport is low due to closure of industries and transport, cruises were at a standstill and ferries were not allowed to carry passengers. Very limited crew changes are taking place, causing stress among seafarers. To survive these difficult times, many shipowners have to take painful measures. Currently, however, one shipping sector is thriving: the tanker market benefited from the price of oil, which has reached a new low.

This collapse in oil prices explains a highly disrupted oil and gas market

The economic effects of low oil prices are likely to reduce E&P activity: at least nine of the world's most planned exploration wells for 2020, both onshore and offshore, are at risk of being suspended. Obviously, this cut in E&P investment will have a major negative impact on the offshore services market, including the theme market for this newsletter: Subsea.

For the subsea market, 2020 promises to be a dismal year: contract awards are low. With the expectation that oil prices will gradually rise, thanks to the relaxation of lockdown measures and thus the emerging demand for oil, oil companies may reschedule projects. And also the projects that were previously scheduled to be sanctioned in 2020 are likely to be pursued in the coming years, thus boosting the subsea sector as well. In addition, the subsea sector can certainly benefit from the emerging market within the energy transition: suppliers can provide services to support blue and green hydrogen infrastructure, energy storage or carbon capture and storage. In Europe, for example, investments in offshore wind will surpass offshore O&G investments as early as 2022.