Subsea Integrity

Market Insight:

In association with

Challenges & Opportunities

Faults and failures across the subsea system have huge cost, safety
and production implications in the highly complex and remote subsea
environment - understanding the condition and performance of critical
assets as part of a proactive subsea integrity strategy is the only way to
eradicate such failures and deliver greater production uptime.
By Philip Chadney, Project Director, DecomWorld

Photo courtesy of FMC Technologies

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FC Business Intelligence 2014

Subsea Integrity Market Insight:

Challenges & Opportunities

Introduction
The subsea industry is thriving with rapid growth and technology
innovation, contributing to an estimated global expenditure
of $115 billion by 2020. Operators with subsea assets are
championing major developments, harsh operating environments
and new methods of recovery. At the same time, they are
challenging the status quo across aging subsea operations by
extending field life, maximizing production and supporting new
developments with existing infrastructure.
Amongst this heavily demanding industry climate, achieving
maximum subsea integrity has never been so critical for operators
to reach production goals, avoid costly interventions and eliminate
the possibility for loss of containment.
Faults and failures across the subsea system have huge cost,
safety and production implications in the highly complex and
remote subsea environment - understanding the condition
and performance of critical assets as part of a proactive subsea
integrity strategy is the only way to eradicate such failures and
deliver greater production uptime.
For too long even the most forward-looking operators have had
a reactive firefighting approach to integrity issues. But, with the
consequences of failure rapidly escalating in the complex subsea
environment, the industry needs to make a step change to a
proactive, risk based subsea integrity strategy. This can only be
achieved by viewing subsea inspection, maintenance, intervention
and monitoring not as isolated events but long term measures to
build a complete picture of system health.
Subsea Integrity
Conference 2014
September 24-25,
Houston, Texas
Build a robust subsea
integrity management
strategy to eradicate failures
and maximize production
www.decomworld.com/
subsea-integrity

An industry-wide wake-up call is now unfolding in the Gulf

of Mexico and providing clear wins for the operators that can
successfully adopt strategies to enhance subsea integrity. Subsea
operations are benefiting from increased availability, reliability,
useful remaining life and production uptime through delivery of a
robust subsea integrity management strategy.
Disasters such as Macondo have only raised the level of awareness
and criticality of integrity activities in the Gulf of Mexico, now
bringing subsea integrity management to the top of the priority
list for operators. It is undoubtedly a rapidly growing business
opportunity for contractors and service provider companies too

Subsea Integrity Market Insight:

Challenges & Opportunities

who can deliver enhanced surveillance to the subsea portfolio

through in-depth asset integrity management support and
cutting-edge technology application.
The gains for operators, contractors and service providers
are inherently clear, however, these stakeholders have yet to
overcome the most imperative barriers to avoid subsea failures
and achieve higher levels of subsea production performance.
Key questions, challenges and benchmarks must be addressed
by the subsea community to unlock the long-term integrity gains
and maximize return on investment. At this pivotal time, such
questions include:
How do we determine optimal inspection frequency of subsea assets?
Should we be implementing monitoring alongside inspection, and to
what extent?
What data do we gather from subsea infrastructure and how do we use
and prioritize this data to make effective decisions?
How can we recognize failures before they occur to minimize the
impact on production?
What are the key criteria to building a robust subsea integrity strategy?
How will subsea processing, pumping and compression impact subsea
integrity philosophy?
Are we doing everything we can to reduce risk and loss of containment?

Subsea Integrity
Conference 2014
September 24-25,
Houston, Texas
Build a robust subsea
integrity management
strategy to eradicate failures
and maximize production
www.decomworld.com/
subsea-integrity

What steps can we take to extend life of brownfield developments and

how can we support them with new IM technology?

These are key questions that we, the industry, are asking. So
to address these key industry challenges, the Subsea Integrity
Conference (SSIC) is returning for its second year to drive forward
the industrys most crucial subsea integrity debates. It will give you
the opportunity to discuss all of these pivotal challenges and engage
with the thought-leaders in this field from across the value chain.
Ahead of the conference, we have combined some key market data
and subsea integrity industry trends which support the discussions
at this years 2nd Annual SSIC (Sept 24-25, Houston, TX, USA).

Subsea Integrity Market Insight:

Challenges & Opportunities

Part I: Subsea Market Overview

The subsea market is seeing rapid growth at a global level as
deepwater recovery becomes an increasingly viable option
for offshore oil & gas operators. High oil prices, technology
developments and the exhaustion of shallow water reserves are
key to this shift. Subsea integrity plays a crucial role in supporting
the subsea industrys exponential growth, and this is manifesting
itself in high-priority developments within the subsea integrity
arena.

Latest Subsea Industry Statistics

Global Subsea Market Expenditure & Growth

Subsea Integrity
Conference 2014
September 24-25,
Houston, Texas
Build a robust subsea
integrity management
strategy to eradicate failures
and maximize production
www.decomworld.com/
subsea-integrity

Source: DCube by Rystad Energy

Subsea Integrity Market Insight:

Challenges & Opportunities

Source: DCube by Rystad Energy

Subsea Processing Market

Source: Data from MarketsandMarkets

GLOBAL DEEPWATER GROWTH

New Deepwater Basins : 2012

Deepwater Basins : 2008

Subsea Integrity Market Insight:

Challenges & Opportunities

Deepwater Gulf of Mexico

The deepwater GoM (>400 ft) is a world-class exploration and
production region where the allure of significant reserves, high
production rates, and strong returns makes the region attractive
for players with deep pockets and the appetite for high cost, high
risk developments.
The deepwater GoM contributes over 80% of the GoMs liquid
hydrocarbon production and is expected to dominate the region
for the foreseeable future.

Gulf of Mexico Outer Continental Shelf oil production

(1947-2013c)

Capital-Intensive
Ultra-Deepwater Developments
Subsea Integrity
Conference 2014
September 24-25,
Houston, Texas
Build a robust subsea
integrity management
strategy to eradicate failures
and maximize production
www.decomworld.com/
subsea-integrity

37% of
Capex

48% of
Capex

2008-2012

2013-2017

Source: Data from Infield Systems Ltd.

Subsea Integrity Market Insight:

Challenges & Opportunities

Part II: The Biggest Industry

Trends Impacting Subsea Integrity
The key industry trends taking place in the subsea sector right
now have a direct impact on how operators plan and execute their
asset integrity management activities. The below table highlights
the major trends and provides a perspective of the implications for
subsea integrity management.
Key Industry
Characteristic/
Trend

How is this impacting subsea integrity management?

Achieving the goal

of the Subsea
Factory

Whilst the Subsea Factory may seem many years away, the reality is that operators are
embracing new ways of minimizing or entirely eliminating the topside from the subsea
development. The trend towards long-distance tie-backs is a case in point.
Moving the topside subsea will require a new approach to integrity and intervention
significantly increasing the risk and consequences of failure.
More specifically, this move results in considerable rotating assets and systems on the
seafloor, as opposed to static. This ultimately means that refurbishment and replacement of
such assets will play a key part in an operators integrity strategy, alongside an increase in
routine subsea interventions.
Given the cost of this equipment and the implication on production rates if the equipment
fails, operators are very vigilant about how they manage system health and maintenance
regime for rotating equipment.

Maximizing
Production
from Brownfield
Developments
and LifeExtension of Aging
Infrastructure

Maximizing recovery from subsea brownfield developments and extending the operating
life of aging infrastructure is a critical operator goal. Production of the average oil and
gas field declines 6% per year after reaching maximum output and, naturally, aging
infrastructure is exposed to greater failure rates. Brownfield developments require critical
integrity management support in order to determine the extent to which operations can be
extended safely and effectively. The status of existing brownfield subsea systems must also
be understood to assess the ability to support new production and developments.
Adapting new solutions to existing infrastructure, managing power, bandwidth and
communication challenges are common limitations which operators with aging assets are
faced with.
Innovative subsea boosting and compression technologies are driving Increased Oil
Recovery (IOR) activity, and are also allowing operators to put forward a cost-effective
case for investment in marginal field development. The knock-on integrity impact of these
technologies is outlined above.

Data and Power

Boom

Data intensive systems and solutions are permeating the industry as the need for operators
to understand the condition of their assets and build detailed service histories becomes a
necessity.
Benchmarking new data against historical data and subsea operations objectives proves
key to interpreting and acting upon the data effectively.
Ability to implement data intensive solutions can be impacted by power and
communication limitations within the subsea infrastructure - particularly common in
brownfield developments.
Delivering power, from generation to distribution, amongst remote subsea locations is
proving a critical milestone for the offshore community right now.

Subsea Integrity Market Insight:

Challenges & Opportunities

Diagnostics

The industry is moving away from relying on redundancy to avoid failures, as it is not a
sustainable model. The industry is putting in place systems that anticipate failures before
they impact production and safety, by building up a detailed service history and analyzing
data to identify anomalies well in advance. Such solutions and approaches include
Condition Performance Monitoring (CPM).
This proactive approach also means that subsea components are available when needed,
avoiding equipment obsolescence issues - which are well known to cause major
interruptions to production.

Automation

Leading-edge technology has set the stage for autonomous operations. The application
of this to the subsea arena is gradually gaining wider acceptance and seen as a huge
opportunity given the challenging location and accessibility of subsea systems - particularly
as the industry embraces harsher operating environments. For the industry to have
complete assurance in subsea autonomous operations, the levels of reliability and integrity
must be proven and standards set to ensure that this autonomous culture can truly
enhance production uptime.

Capex
Compression

Stagnant oil prices coupled with rising E&P costs are putting a strain on operators in the
Gulf of Mexico. Industry advances including subsea processing can assist in reducing
Capex, however the knock-on effect on Opex, through heavier investment into subsea
intervention and equipment replacement campaigns in the long term, is yet to be
determined.

Electrification

The industry is seeing the increasing adoption of electronics in subsea systems, as opposed
to hydraulics, which has widely known advantages and efficiencies.
However, when electrical faults occur in subsea production systems it can be challenging
establishing the precise cause or location of the fault. Integrity solutions which assist in
pinpointing the location of such faults are critical to avoiding interruptions to production
and equipment obsolescence issues.

Harsh Operating
Conditions

Deepwater, HPHT and long-offset environments continue to present challenges for subsea
systems, from gathering inspection data in remote locations to ensuring assets can operate
to ultimate capacity.

Post-Macondo
Integrity & Safety
Philosophy

The regulatory bodies, including BSEE, are increasingly focusing on the industrys ability to
operate to the highest standards of safety in high risk subsea environments this means
Asset Integrity Management must play a crucial role in demonstrating safety standards.

Standardization

There is a major industry move towards standardization of subsea hardware and processes
across the subsea market sector. Higher capex, more stringent reliability requirements,
increasing project complexity and harsher operating environments are all driving subsea
standardization.
Aside from the cost efficiencies associated with standardization, it also provides clear
benefits for the subsea integrity and intervention process, by allowing for a consistent
industry approach to integrity challenges - from technology to process.

Subsea Integrity Market Insight:

Challenges & Opportunities

Part III: Scale of Subsea

Integrity Challenges
Below is an overview of some of the key subsea integrity
challenges recognized by subsea operators, contractors and
service providers - allowing you to identify, prioritize and adopt
strategies to mitigate such threats.
Relative Cost of Failures

Anticipating & Preventing Early-Life Failures

Prioritizing & Leveraging Subsea Data
Life Extension Issues & Methodologies
Brownfield Communication & Power Limitations

Subsea Goal Imposed Upon

the Bath Tub Curve

Subsea Integrity Challenge

Gathering Inspection Data from Harsh Environments

Subsea Integrity
Conference 2014
September 24-25,
Houston, Texas
Build a robust subsea
integrity management
strategy to eradicate failures
and maximize production
www.decomworld.com/
subsea-integrity

Building a Robust Subsea IM Strategy

Defining Inspection Frequencies
Assurance in Chemical Injection
Monitoring vs. Inspection Strategy and Balance
Regulatory Requirements &
Standards for Subsea IM
Validating & Implementing
New IM Technologies
Equipment
Obsolescence
Bridging Capex
& Opex
Assessing Subsea
IM ROI

Scale of Subsea Integrity Challenge

Subsea Integrity Market Insight:

Challenges & Opportunities

Expert Perspective
Subsea Systems are highly complex, cover large
geographic areas (topside and subsea) in hostile
environments, involve multiple engineering disciplines,
and are typically comprised of numerous newly developed
technologies designed to support high pressure and high
temperature production systems in ultra-deep waters.
The majority of subsea integrity management programs
focus on the general visual inspections and tests that
are performed periodically with ROVs. While these ROV
inspections and tests are important, they do not provide a
complete assessment of the integrity and/or reliability of
the various subsea systems. Engineers must also monitor
various data points to verify that critical subsea systems
are within their design limits. Trending is used to assess
the condition and performance of these subsea systems
to confirm that they are projected to remain within those
design limits, or if operational adjustments are needed to
avoid upset conditions that could jeopardize integrity or
reliability.
Gary Giordano, Subsea Engineering Manager,
Chevron

Subsea Integrity Market Insight:

Challenges & Opportunities

Conclusion
In highlighting the biggest subsea trends alongside the most
critical subsea integrity challenges, it is clear that the industrys
future path relies on its ability to embrace, adopt and execute a
robust subsea integrity management strategy to deliver higher
levels of integrity and minimize failures.

How does this impact each tier of the value chain?

For operators
Now is the time to adopt a proactive approach to subsea integrity
and move away from a reactive maintenance and run it until it
fails mind-set. This can only be achieved through implementation
and delivery of an in-depth subsea integrity management strategy,
adopting a risk-based approach to integrity and effectively
prioritizing and leveraging critical subsea data.

For contractors and service providers

Now is the time to position your products and services strategy at
the center of this market activity and growth, by understanding the
full range of operator challenges experienced and adapting your
surveillance and integrity solutions according to the very latest
operator demands. This, in turn, will provide you with the best
chances of securing a slice of this $45 billion market.

For regulators and industry bodies..

Subsea Integrity
Conference 2014
September 24-25,
Houston, Texas

Now is the time to set the industry benchmark and platform for
operators, contractors and service providers to thrive from
developing subsea inspection and maintenance standards which
encourage safe and cost-effective subsea operations, to ensuring
that new leak and failure detection technology is effectively
validated for immediate benefit within the field.

Build a robust subsea

integrity management
strategy to eradicate failures
and maximize production

The entire subsea integrity value chain will be gathering in

Houston on 24-25 September in Houston at the 2nd Annual
Subsea Integrity Conference to tackle these challenges and
opportunities head on.

www.decomworld.com/
subsea-integrity

Subsea Integrity Market Insight:

Challenges & Opportunities

2nd Annual Subsea Integrity Conference

September 24-25, Houston, TX, USA
The Subsea Integrity Conference (SSIC) is the only meeting point for the subsea O&G
community to address the challenges, strategies and opportunities associated with maximizing
integrity and reliability across the entire subsea and SURF portfolio.
Over 25 expert speakers, including Anadarko, Chevron, ConocoPhillips, Hess and Total EP RT
USA will be providing leading-edge case study insight addressing subsea data challenges and
solutions, IM strategy best practice and the very latest industry trends impacting integrity.
The 2014 SSIC will attract over 200 subsea operations managers, engineers, integrity experts
and more, over 2 days of intensive subsea technical discussion, top-level networking and
business development.

Leading Companies Already Confirmed for the 2014 SSIC Include:

Exclusive Features for the 2014 SSIC:

Get exclusive insight into how operators are managing their subsea integrity activities with leading
subsea perspectives from Anadarko, BP, Chevron, ConocoPhillips, Hess Corporation and Total EP RT USA

Capture, prioritize and leverage subsea data to anticipate and avoid failures so you can reduce
operational expenditure and make effective life-of-field decisions

Address the limitations of brownfield integrity management activities to implement a cost-effective

action plan and extend useful remaining life of aging subsea infrastructure

Review the very latest strategies and technologies for effective monitoring & inspection to prioritize
your subsea operations for maximum production performance

Find out how critical industry trends including subsea pumping and compression advances addressed
will impact your integrity management and intervention strategy

EXLUSIVE TICKET OFFER: As you have downloaded this market insight, you can use the
discount code SSIC14 and receive an extra $100 discount off the currently listed price
when you reserve your place at www.decomworld.com/subsea-integrity

For more information on the 2014 SSIC: pchadney@decomworld.com 1 800 814 3459 ext 4341
www.decomworld.com/subsea-integrity/