BUSINESS OUTLOOK Overall Outlook - The short-term outlook for crude oil has improved. Economic activity continues to expand, driven by strong fiscal stimulus, COVID vaccinations and the re-opening of local economies. Oil prices have been supported by the industry's more disciplined capital spend, particularly for OPEC+ countries which appear to be focused on realizing a price that supports both economic growth and continued energy investment. These conditions could also provide greater price stability over the intermediate term.
Long-term demand for energy is forecast to increase. Our conversations with clients remain constructive, and we see continued improvement in the broader market outlook as investments in new sources of oil and natural gas production increase over the intermediate-term.
Looking beyond the strength of these traditional markets, we believe that offshore will also play a meaningful role in the the transition to renewable energy resources and reduction of carbon emissions.
We are making real progress in our focus areas of wind, wave, hydrogen and
carbon transportation and storage. We recently announced the acquisition of the
remaining shares of Magma Global, a leader in advanced composite technologies,
as well as the formation of our strategic alliance with
As the subsea industry continues to evolve, we have taken actions to further streamline our organization, achieve standardization and reduce cycle times. The rationalization of our global footprint will also further leverage the benefits of our integrated offering. We aim to continuously align our operations with activity levels, while preserving our core capacity in order to deliver current projects in backlog and future order activity.
We have experienced renewed operator confidence in advancing subsea activity as
a result of the improved economic outlook, lower market volatility and higher
oil price. With crude above
Front-end engineering and design ("FEED") activity continues to improve. FEED
activity in the current year is expected to return to the more robust levels
seen in 2019, which further supports our view of a sustainable recovery for
deepwater. We expect at least 60% of the projects in the current year that are
undergoing studies with
•We anticipate higher activity in subsea services, with the industry's largest installed base; and
•We expect a higher mix of iEPCI™ project awards, demonstrating strong geographic diversity and new adopters of our unique, integrated approach to subsea development.
We are confident that
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project orders, driven by continued investment in the pre-salt field
discoveries. We anticipate additional market growth potential coming from the
Surface Technologies - Our performance is typically driven by variations in
global drilling activity, creating a dynamic environment. Operating results can
be further impacted by stimulation activity and the completions intensity of
shale applications in
In 2021, our completions-related revenue has recovered, driven by the
Drilling activity in international markets is less cyclical than
In recent years, our international revenue has become a greater proportion of
total segment revenue. We expect a gradual and steady recovery in well count in
2021 to drive international market growth. Increased spending will be led by
national oil companies, particularly in the
Our unique capabilities in the international markets, which demand higher specification equipment, global services and local content, provide a platform for us to extend our leadership positions. We remain levered to these more resilient markets where we expect to source approximately 65% of our full year Surface Technologies revenue in 2021.
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