The value of orders received in the offshore engineering market has significantly increased in the first half of the year.

2017-07-19 09:00

From January to June 2017, a total of 25 units of offshore engineering equipment were traded globally, with a total order value of approximately US\$6.8 billion. It is expected in 2017 that Ocean Engineering equipment will remain sluggish, but overall better than last year, with an annual transaction volume of around US\$9 billion and 100 units. Under the general sluggish market of ocean engineering equipment, the performance of various types of equipment shows significant differences: drilling equipment remains weak, production equipment shows growth, and ocean engineering vessels performed averagely. On the other hand, with the increasing emphasis on clean energy and the acceleration of ocean development, some natural gas utilization equipment, new energy development equipment, and fishery farming equipment will be developed.

Offshore Equipment Price Index May Have Bottomed Out

From January to June 2017, a total of 25 units of offshore engineering equipment were traded globally, with a total order value of approximately US\$6.8 billion. Although the transaction volume has decreased compared to 36 units in the same period last year, the order value has increased significantly compared to US\$1.3 billion in the same period last year. The main reason is that several high-value production equipment were traded this year. Among the offshore engineering equipment traded this year, the number of production equipment traded was 6 units, with an order value of approximately US\$5.1 billion, accounting for 75%. This includes 1 semi-submersible production platform, 2 FPSOs, 1 tension leg platform, and 2 FLNGs.

Offshore equipment prices show signs of bottoming out. In the first half of 2017, the prices of new jack-up drilling rigs ，semi-submersible drilling rigs, drilling ships have not changed. Currently, the average price of newly built jack-up drilling rigs over 350 feet is US\$155 million, remaining unchanged for 10 consecutive months since August 2016, a decrease of 35.4% compared to US\$240 million during the peak period in 2013; the average price of semi-submersible drilling rigs and ultra-deepwater drilling ships has also been at US\$450 million for more than ten consecutive months.

South Korean Shipyards Regain Top Spot

In the first half of 2017, the three major shipyards in South Korea made continuous efforts to win large orders, and the order value of offshore engineering equipment returned to the top globally. According to statistics, South Korean shipyards received a total of 5 units of offshore engineering orders in the first half of the year, with a total order value of approximately US\$4.5 billion, accounting for 71% of the global total. This includes 3 FSRUs (approximately US\$230 million/unit), 1 semi-submersible production platform (approximately US\$1.27 billion), and 1 FLNG (approximately US\$2.54 billion). The minimum amount for a single unit of offshore engineering equipment is approximately US\$230 million.

Unlike the continuous large orders in the South Korean market, other countries only had some small offshore engineering equipment transactions. In the first half of the year, Singapore shipyards only received 2 offshore engineering equipment orders, including a newly signed tension leg platform and an effective FLNG conversion order (signed in 2015, effective in May this year).

China's Order Volume Still Accounts for Nearly Half

In the first half of 2017, China undertook a total of 12 units of offshore engineering equipment, with a total value of approximately US\$600 million. Among them, Wuchang Shipbuilding Industry Group undertook a total of 5 orders, including 4 deck transport vessel orders signed with Samsung C&T and 1 deep-diving work support vessel order signed with Shanghai Salvage Bureau, ranking first in China's order volume. In addition, Zhoushan Pacific Offshore Engineering received an order for a small FSRU with a storage capacity of 26,000 cubic meters and a daily processing capacity of 50 million cubic feet of gas. Other domestic shipyards mainly undertook wind turbine installation vessels 、 crane vessels and other small offshore engineering equipment such as jack-up platforms.

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