Projects Developed By Shell And BW Energy In Brazil Expected To Contribute To The Global Subsea Christmas Tree Supply Market

Shell and BW Energy Contracts Involve the Gato do Mato and Maromba Projects, Respectively, and Are Expected to Aid in the Growth of This Market During the Second Semester

Brazil could, in this third semester, be the main stage for the development of the global market for underwater Christmas trees. According to a survey conducted by Westwood Energy, it is expected that the major contracts in this sector, between July and September, will include the Gato do Mato project, by Shell, in the Santos basin; the Maromba project, by BW Energy, in the Campos basin; and the Trion project, by Woodside Energy, in Mexico.

So far, a total of 123 underwater Christmas tree contracts have been signed this year. According to the most optimistic forecasts, this number may still increase to up to 262.

About the Gato do Mato and Maromba Projects

The Gato do Mato prospect was discovered in 2010 through exploratory work in block BM-S-54. In 2017, the oil company Shell obtained the South Gato do Mato area in the pre-salt while the 2nd sharing round was taking place. The project will be the first with which Shell will operate in the pre-salt, making it particularly important. Production is expected to begin in 2026.

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Moreover, the FPSO contracted by Shell for the area will have a production capacity of 90,000 barrels of oil per day, in addition to processing 8.5 million cubic meters of natural gas per day.

The Maromba field, on the other hand, is operated by BW Energy, which has already informed about the use of the FPSO Polvo in the project. The development plan for this venture is based on an initial drilling campaign of three wells, with the first oil planned for 2025. Additionally, a second campaign is scheduled for 2027, which includes three more wells.

In light of the advancements made with the two mentioned projects, the market expects that by the end of September, Shell and BW Energy will reveal the suppliers of subsea equipment for the fields.

Subsea Tree Contract for the CLOV Phase 3 Project in Angola Was the Only One Announced in June, Considering the Global Market

In June 2022, considering the global market, only the subsea tree contract for the CLOV phase 3 project in Angola was announced. The venture involves up to five subsea trees, which raised the global count of subsea tree units to 123 during the first semester. This number, however, is 42% lower than the forecasts made by Westwood in January of this year.

In this regard, the company stated that its demand outlook for subsea trees for the years 2022 to 2026 remains unchanged, amounting to approximately 1,540 units. During this period, Petrobras will lead the list with the highest number of orders (217).

Also in June, the company TechnipFMC disclosed its involvement with new subsea supplies in Brazil. The company announced the signing of a letter of intent with Equinor to promote an integrated front-end engineering and design study (iFEED) in its BM-C-33 offshore development in the country.

The FEED study encompasses the option to move forward with a direct contract with TechnipFMC for the integrated engineering, procurement, construction, and installation scope (iEPCI) of the project. The final investment decision is expected in the first semester of next year.

Regarding the rest of 2022, Westwood Energy expects that more than 64 subsea tree contracts will be signed worldwide. Finally, another 75 deals in this market are considered likely or possible.