At this year’s Oil & Gas Industry Forecast event, EY presented the 2016 Results Dutch Oilfield Services (OFS) Analysis
. In this industry analysis EY looks into the financial results of 2016 and discusses the dynamics of the industry going forward. Conclusion: the oil and gas market remains challenging and companies should seize the opportunities in the offshore wind industry.
Though oil prices have gradually crept up over the recent period, the market is still sluggish and the short-term outlook remains bleak. Everyone is convinced that the market will pick up again – but when? This question, amongst others, was the central theme of the 2017 Oil & Gas Industry Forecast event, this spring at STC Rotterdam.
One of the keynote speakers was Guillaume Petit of EY, who presented the 2016 Results Dutch Oilfield Services Analysis. Main conclusion: The continued low oil price obviously had a negative effect on the Dutch OFS industry in 2015. Compared with 2014, revenues decreased in the reservoir & seismic segment, the exploration and production drilling segment and the engineering, procurement and construction segment. The data available over 2015 show an overall decrease of 5% in revenues generated by the Dutch OFS industry compared with 2014, dropping to a total of 24.7 billion euro.
The Operations segment however showed positive results in 2015, a 2% increase in revenue compared with 2014, totalling 8.2 billion euro. Since this segment is at the end of the cycle, it is the last to show the adverse effect of the oil price remaining low, with order books providing work over the course of 2015. The EY data however, does appear to show stabilised margins in absolute terms in 2015, indicating a decrease in relative profitability.
The overall decrease in revenues explains why less people were employed in the Dutch OFS industry than in 2014. Despite all this, Petit stressed that the OFS industry remains an important factor in the Dutch economy with a strong heritage and an excellent reputation across the globe.
Looking forward: offshore wind farms as a major opportunity
To operate in a sustained low oil price environment, EY identified four opportunities for OFS companies. On pole position are offshore wind farms, being a crucial part of sustainable energy policies around Europe. The construction and operation of these farms are similar to activities already deployed by the OFS industry. Dutch OFS companies can therefore easily implement their current product and service offerings to accommodate the offshore wind industry.
The Dutch OFS industry can also take a leading role in decommissioning activities on the DCS. Especially the Rotterdam area, with its resources and infrastructure, has the opportunity to become Europe’s leading hub for decommissioning oil platforms.
Reducing costs and increasing efficiency have resulted in innovative technologies throughout the sector. Digital innovations, like drones, IT data management and Internet of Things technology, and physical like new materials for pipelines. The Dutch OFS industry has great potential to implement new, innovative technologies leveraging its strong heritage and the entrepreneurial and innovative spirit of hundreds of smaller OFS companies.
And last but not least, strategic collaboration agreements and mergers between OFS companies and operators illustrate a fundamental shift in the operating model. Operators and suppliers are working together as one integrated or aligned team to reduce costs and gain efficiencies.
Oceanteam’s renewables activities
While the oil and gas market remains challenging, Oceanteam already has a strong focus on offshore renewables, engineering and logistics solutions. Furthermore, Oceanteam is in the process of creating new revenue sources in the fields of civil engineering and offshore-related logistic solutions, making use of the same core capabilities that have made Oceanteam the distinguished niche player it is known as today.
Here, you can find an overview of our cabling solutions
and engineering services
for offshore wind farms.