Mike Meade from M3 Marine Group gave a presentation at the Subsea Conference in Singapore on March 18-19, 2015 about country-specific finance challenges and opportunities in the subsea sector. He noted that exploration and production spending is down, resulting in decreased demand for subsea services in 2015-2016. This coupled with oversupply in the industry leaves some vessel owners exposed, especially those with more commoditized tonnage like ROV support vessels. However, consolidation in the industry could lead to improved market discipline. Meade also discussed how demand remains in Mexico and Brazil but projects there face delays and increased costs. The oil price shock and high industry costs have caused oil companies to cut budgets significantly.

1. Panel Discussion
Country-specific finance challenges and opportunities in
subsea sector
Mike Meade, M3 Marine Group
Asian Offshore Support Journal
Subsea Conference
Singapore
18 & 19 March 2015

2. M3MARINEGROUPPTELTD
1 Commonwealth Lane, #09-19, ONE Commonwealth, Singapore 149544 T +65 6327 4606 M mail@m3marine.com.sg W www.m3marine.com.sg All rights reserved.
• E & P spending down
• We saw signs of this as early as Q1 2014
• Demand for subsea services is down in 2015 and 2016 which
coupled with increasing supply is a problem for the industry
• Oversupply will leave some Owners exposed, especially in
commoditised tonnage (ie ROV support)
• One glimmer of hope could be a drive towards consolidation
leading to market discipline
Setting the scene……

3. M3MARINEGROUPPTELTD
1 Commonwealth Lane, #09-19, ONE Commonwealth, Singapore 149544 T +65 6327 4606 M mail@m3marine.com.sg W www.m3marine.com.sg All rights reserved.
Setting the scene (2)……
Demand growth still apparent in Mexico
and Brazil… but…
Neither place is easy to work, Brazil
especially so
Project lead times have increased,
caused by delays introduced by the oil
price ‘shock’
It is estimated we will not see activity
levels reach 2014 levels until at least
2017
Big Oil starting running out of cash
BEFORE the decline in the oil price

4. M3MARINEGROUPPTELTD
1 Commonwealth Lane, #09-19, ONE Commonwealth, Singapore 149544 T +65 6327 4606 M mail@m3marine.com.sg W www.m3marine.com.sg All rights reserved.
Setting the scene……
It’s not just about the oil price….
• The drop in the oil price
is compounded by a
massive increase in costs
across the E&P industry
• The O&G industry has
‘lunacy’ levels of costs
associated with it
• We have all witnessed
the knee jerk reaction as
big oil gets its red pen
out

5. M3MARINEGROUPPTELTD
1 Commonwealth Lane, #09-19, ONE Commonwealth, Singapore 149544 T +65 6327 4606 M mail@m3marine.com.sg W www.m3marine.com.sg All rights reserved.
How is the market reacting ?

6. M3MARINEGROUPPTELTD
1 Commonwealth Lane, #09-19, ONE Commonwealth, Singapore 149544 T +65 6327 4606 M mail@m3marine.com.sg W www.m3marine.com.sg All rights reserved.
A ray of hope..?
Often asked what I would
invest in.
I have invested in the
Subsea ‘true’ DSV space.
Only 10 ‘true’ DSV’s being
built in the world
2 of these are about to be
cancelled (whose you may
ask !)
Graphic courtesy of

7. M3MARINEGROUPPTELTD
1 Commonwealth Lane, #09-19, ONE Commonwealth, Singapore 149544 T +65 6327 4606 M mail@m3marine.com.sg W www.m3marine.com.sg All rights reserved.
A ray of hope..?

8. THE END
Asian Offshore Support Journal
Subsea Conference
Singapore
18 & 19 March 2015