Modest growth for subsea valves
Current market conditions have resulted in a demand for subsea valves but the growth in this market will be determined by the comparative cost and availability of new oil and gas reserves .
The demand for subsea valves is increasing due to the elevated prices of oil and gas . Over the next few years prices are likely to remain high due to the world political situation . Increases in subsea production are underway but one constraint is the long period between project start and completion . There are also uncertainties about the quality and accessibility of the reserves . Ukrainian forces recently attacked offshore oil and gas drilling platforms in the Black Sea . International valve and other component suppliers have discontinued service to Russian oil and gas producers . The embargo on Russian oil and gas is strongly backed by the EU and many democratic countries . Rental rates for offshore oil and gas rigs have soared , and their availability is one of the hurdles . New subsea wells require years to complete . In contrast wells in the Permian basin in Texas can be completed in months . The growth in the subsea valve market will be determined by the comparative cost and availability of new oil and gas from onshore reserves . OPEC + agreed to boost its monthly production growth target from 432,000 bpd to 648,000 bpd recently . But oil prices actually rose . It was because of lack of spare capacity . This is due to underinvestment in new oil exploration , in large part a result of the investor shift to ESG opportunities and government policies . Across OPEC +, there are only a few countries that can actually boost their oil production . EIA forecasts that crude oil prices will remain high enough to drive U . S . crude oil production to record-high levels in 2023 , reaching a forecast 12.6 million barrels per day ( b / d ). EIA expects new production in the Permian Basin to drive overall U . S . crude oil production growth . EIA expects U . S . crude oil production to increase to 12.0 million b / d in 2022 , up 760,000 b / d from 2021 . EIA forecasts crude oil production to rise by 630,000 b / d in 2023 to average 12.6 million b / d . More than 80 % of that growth will come from the Lower 48 states and not from Alaska and the Federal Offshore Gulf of Mexico . Production from new Lower 48 wells , particularly in the Permian region , will drive the forecast of U . S . crude oil production growth . Legacy production , or crude oil production from existing wells , typically declines relatively quickly in tight oil formations , and EIA expects that production from new wells will offset these legacy production declines .
The following factors shape the subsea valve market
• CapEx is the leading indicator of subsea valve spend
• Major deep subsea reserves and CapEx are West Africa , Latin America , and GoM ( Brazil , USA , Nigeria , Angola , Ghana ).
• Development time for subsea investments averages 5 to 8 years , from exploration to first production .
• Subsea completions ( wet trees ) are strongly favored for ultra-deepwater basins at depths greater than 5,000 feet for reasons of cost and technological performance . For shallower waters , dry trees are favored for lower cost , direct vertical access , and established track record .
Monthly crude oil production in the United States ( 2013 – 2023 ) million barrels per day
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STEO forecast eia
About the author : Robert McIlvaine is the CEO of the McIlvaine Company which publishes Industrial Valves : World Markets . He was a pollution control company executive prior to 1974 when he founded the present company . He oversees a staff of 30 people in the U . S . and China .
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Figure 1 . U . S . crude oil production . legacy Lower 48 states ( excluding Federal Offshore Gulf of Mexico )
Lower 48 new production
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