ANALYTICS
BY KIERAN CLARK
A MARKET IN QUARANTINE – OFFSHORE ENERGY OUTLOOK
T
his year has been challenging for many industries around the world due to the COVID-19 pandemic. As important as the offshore energy is to the global economy, it has not been immune from impact. Demand for hydrocarbons has been reduced compared to years past while production capability has been met with the difficulties imposed by quarantines and social distancing requirements. As a result, submarine fiber activity in this market has been brought almost to a standstill. However, while the immediate impacts are disappointing, the long-term effects of the global pandemic could result in a boon for the submarine fiber industry. COVID-19 has forced many industries to expand their remote work and automation capabilities – all of which need the capacity and reliability that only fiber can provide. As the demand for more capacity to offshore facilities grows, so will the demand for submarine fiber systems as the more traditional satellite and O3b telecoms solutions are simply unable to meet the data demands.
BY THE NUMBERS
Before 2019, there were several new systems added around the world as various offshore energy companies had begun to realize the benefits of
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SUBMARINE TELECOMS MAGAZINE
fiber systems to their offshore facilities. However, a dip in oil prices in late 2018 through early 2019 and an overall global economic downturn slowed or flat out halted progress on systems for 2019. As prices and the economy began to pick back up through the latter half of the year, several systems were announced for 2020 and beyond – making it seem like things were back on track. Of course, COVID-19 hit the world towards the end of Q1 2020 and brought the entire world to a standstill with quarantine procedures effectively keeping people at home. With less commuting and travel, demand for oil and gas was brought down significantly
in 2020. Due to these circumstances, it is unlikely that the 4 systems currently planned for 2020 will enter service. However, as the industry focuses on utilizing new technologies to increase efficiency and automation as a key strategy to reduce cost and maintain margins – especially in light of the new reality brought on by pandemic quarantine and social distancing procedures – demand for new offshore fiber systems should increase through 2023. With a cautiously optimistic outlook for the next 3 years, the length of cable added annually includes a potentially dramatic increase in 2023. With 15 systems overall planned for