Offshore oil extraction makes up nearly a quarter of worldwide petroleum production, with more than 20,000 platforms of all sizes and designs, mostly to be found in five main areas: the Gulf of Mexico, the Persian Gulf, West Africa, the North Sea and major new discoveries off Brazil.
For these rigs to operate, tens of thousands of workers need to be transported to and from the platforms every day, giving rise to the modern offshore service company.
Due to the slow process of transporting these crews by boat, most companies have opted to use helicopters instead, especially with platforms moving ever further offshore.
Today, the top 5 offshore service companies account for nearly $3 billion. (see table on right)
Offshore drilling is the most complex and expensive way of accessing oil and gas reserves, particularly when it comes to deep water and ultra-deep water exploration activities.
The rising complexity and costs of such endeavors demands huge capital investments, long term commitments, higher efficiencies and a growing reliance on technology in order to reduce uncertainties.
The resiliency of high oil prices is fueling increasing exploration and production spending by operators as the industry pushes further offshore into ever-deeper water. By 2020, offshore oil production is expected to account for 34% of the global output up from 25% in 1990.
Wind Power At Sea
A relatively recent development may prove to expand the offshore service market: Wind Turbines. For many years, wind turbines at sea have been producing significant quantities of electricity for a large range of countries across the globe.
A Stanford University study found that placing wind turbines off the East Coast could meet the entire demand for electricity from Florida to Maine, accomplished by strategically located wind farms comprised of 144,000, 270 ft tall turbines generating 5 megawatts each.
Meanwhile, such farms are materializing at an accelerating rate around the world, creating a new market for offshore companies interested in maintaining these structures.
While the future appears bright for offshore oil, a dark cloud looms over the horizon. On April 20,2010, British Petroleum’s Deep Water Horizon oil platform exploded in the Gulf of Mexico, killing 11 workers and creating the largest accidental marine oil spill in the history of the petroleum industry.
As part of its resolution of criminal claims with the U.S. government, BP agreed to pay $4.5 billion, including $1.256 billion in criminal fines. BP also set up a $20 billion fund to address claims, of which one million had been filed by late 2011.
Global Response Network
One of the outcomes of this nightmarish scenario has been for the major oil companies and various governments to create the “Global Response Network” dedicated to providing rapid oil spill mitigation and containment particularly through the use of booms.
Funded primarily by the major oil companies, the network consists of worldwide array of organizations dedicated to containment and mitigation:
This development has created new opportunities for offshore service companies, particularly those who value the environment.
Due to the inherent danger and expense in transferring tens of thousands of workers to and from oil platforms every day via slow boats or costly helicoptera, oil companies need a faster, better, cheaper solution.
FAST OFFSHORE SERVICES MARKET
FAST OFFSHORE SERVICES : Offshore Rig Count
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Ingo Wagner / Reuters
Offshore wind turbines generate zero-emission sustainable energy in Germany’s North Sea, utilizing a service platform that doubles as a transformer to send electricity to the mainland. Germany and Denmark are leaders in the offshore wind industry.