A Comprehensive Look at the ROV Industry

ROV Industry

In this day and age, remotely operated vehicles (ROVs) can explore the aquatic world deeper, longer, and at times, better than divers. For that reason, the offshore oil and gas industry largely benefits from ROVs. Portability, easy deployment, low power consumption, and efficiency are just among its numerous advantages.

As a result, ROV training has been in huge demand globally through the years. Here in the Philippines, SubNet Services takes pride in being the first to offer the ROV Pilot Technician training course.

However, recent years have seen the ROV industry experience some uncertainties. Let us now take a look at what some industry experts have to say.

ROV Industry: Straight from the experts

“While I called 2016 the ‘year of tough decisions’, I’d characterize 2017 as ‘the slow road back’.” This was according to John England, US Energy and Resources leader and US and Americas Oil and Gas leader for Deloitte LLP.

“Supply and demand balances are still slow to return to a sustained equilibrium, although the Organization of the Petroleum Exporting Countries (OPEC) decision to cut production should help accelerate the drawdown of global oil inventories, even if OPEC countries do not completely deliver on their announced production cuts.”

England added that there were reasons to be positive and to not be positive that would largely offset each other. Hence, his overall view for the industry this year was “we are on a slow path to recovery”.

Similarly, the editor of ROV Planet Richie Enzmann observed this in their latest issue: “After the last thirty months of depression in the industry, the signs of recovery seem to be appearing on the horizon.” He thus sincerely hopes that this positive spiral will continue on and “we can all get back to business as usual”.

But before we look forward to 2017, let us take a step back and start from the beginning.

ROV Industry in 2014-2015: Start of the slowdown

After nearly five years of stability, global oil prices fell sharply in June 2014.

According to BBC News, “From 2010 until mid-2014, world oil prices had been fairly stable, at around $110 a barrel. But since June, prices had more than halved”. Brent crude oil dipped below $50 a barrel for the first time since May 2009. US crude was also down to below $48 a barrel.

Therefore, the following year had been dubbed as a challenging year ahead on stubbornly low oil price. Oil price was up but poised for record 7 month drop and US crude oil stocks returned to 1930s crisis levels.

A research published by DNV GL in February also said that confidence in the outlook for the oil and gas industry had dropped dramatically among sector professionals from 65% to 28%. Thus, oil and gas industry professionals were pessimistic about the future.

As a result, 2015 ended with crude falling below $35 a barrel for the first time since 2009 and Brent sliding to 11-year low as glut supply balloons. In other words, oil ended 2015 in downbeat mood.

ROV Industry in 2016: Continuation of the downturn

A year after, the global oil and gas industry faced 2016 in the midst of one of the severest downturns in 30 years. This was based on AlixPartners’ Oil and Gas Outlook.

“Industry revenue for 2015 is estimated at 10 to 20% below that for 2014, with industry profits expected to shrink by 20 to 30%. That declining trajectory seems likely to continue in 2016.”

In May, the global oil and gas job losses reached 350,000 and counting, according to a report by Graves & Co. Its president, John Graves observed that the downturn persisted beyond the expectations of many in the industry. Additionally, the impetus to cut costs “has significantly affected those responsible for finding, developing, and producing oil and gas.”

In October, International Energy Agency (IEA) released its Oil Market Report for the month. The said report informed that OPEC oil supply was at an all-time high in the previous month. Moreover, growth in oil demand dropped to a four-year low in the third quarter of the year.

Nonetheless before 2016 ended, oil soared to $54 per barrel – highest level in a year amid hopes in financial markets that the OPEC cartel would make a deal to curb crude production stick. Sam Wahab of Cantor Fitzgerald Europe thus viewed 2017 to “likely see prices around the $55-$60 a barrel mark”. He also said that “we may yet see further jumps in prices”.

ROV Industry in 2017: Better year, better beginnings

Finally this year, the oil and gas industry has seemed to be facing a better beginning.

In January, Barclays said oil companies may boost Exploration and Production (E&P) spending after two years of declines, as oil prices had recovered. In addition, oil discoveries were seen recovering after crashing to 65-year low, according to Wood Mackenzie.

“By making operations more efficient, focusing on easier targets and paying lower fees to contractors, oil companies are getting more for their money. Coupled with renewed industry optimism sparked by an OPEC-led deal to curb output and boost prices, that could mean exploration results won’t get any worse.”

Furthermore, John Graves of Graves & Co. sees the oil industry growing again after losing half-million jobs. David Anderson of Barclays added that “oil companies start to hire back workers to take advantage of oil prices above $50/barrel”.

ROV Industry: Skills Shortage and Training Investment

Three years back at around March 2014, oil and gas skills shortage was seen as a global problem. A study by Oil and Gas People showed that many oil and gas companies struggled in recruiting experienced staff. Some were even reporting wage hikes of over 20%.

However, Kevin Forbes of Oil and Gas People saw it differently. He didn’t consider skills shortage as a lack of people willing to work in the industry. He instead viewed it as a huge gap in semi-skilled to experienced personnel.

“The industry is suffering as a result of many years of under investment in training and also from an ageing workforce.”

Invest in ROV Training, Invest in SubNet Services

ROV training schools like SubNet Services can definitely be of help in this so-called skills shortage in the ROV industry. Despite the downturn, we continuously offer ROV training courses, as well as a more rewarding and cost-effective training than elsewhere.

John England said, “The oil and gas industry is incredibly resilient and has some of the brightest, most innovative people. This is clearly what leads to my overall optimism about the industry for 2017 and beyond.”

Interested to be an internationally certified ROV Pilot Technician? You can be one if you book our ROV courses. We can also offer you up to 15% discount! Contact us now for more information. Our Customer Sales Support will gladly answer all your enquiries.

Remember, oil prices may change; but skills will always remain.

Be trained and internationally certified!
Only here at SubNet Services.


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