On the second China Sourcing Summit on Petroleum Equipment (CSSOPE 2012) last month, Zhao Zehua, director of offshore industry department of CSIC, said that global offshore new order value came to $69.0bn in 2011, 130% up year on year. It is the first time offshore orders surpass other newbuilding orders in contract value and dominate global new orders.
Zhao points out that what underlies the prosperous offshore market is the high-value orders. The average price for drilling equipment and production equipment (newbuilding and conversion) is about $397m each, much higher than the average value for common newbuilding order.
The trend is likely to continue into 2012 with unanimous bright outlook for oil and gas exploration and relevant equipment development. Offshore plants feature high-tech and high value, thus the designing units, building units and supporting units can all reap huge profit in the market. It is estimated that world deepwater investment is to increase by 90% in next five years and offshore industry is also to embrace a brilliant future.
Global ship tycoons are passionate in entering the sector and Korean Big3 are all actively developing its offshore business.
Chinese shipyards are also striving to make the transition and open up offshore R&D. CSIC is planning to invest about $635m convertible bond into expanding offshore and energy production equipment capacity. Besides, COSCO, Mingde Heavy Industry and many other domestic shipbuilders are devoted to offshore plant development.
However, Zhao also put forward that Chinese shipbuilders are lagging behind both in technology and experience and thus still have a long way to catch up with the industry leaders.