KONGSBERG'S POSITION IN THE OFFSHORE MARKET
The offshore market encompasses exploration and production at sea, and the landing of oil and gas. It also includes support functions such as supplies and operative support, as well as maintenance and service on platforms and vessels. KONGSBERG contracts for all segments of the offshore industry.
The world faces a shortage of energy. Oil and gas account for about 50 per cent of overall energy consumption. Economic growth in Asia will ensure growth in this area in the years ahead.
In 2006, new orders for the offshore market totalled MNOK 2 700. Due to the high utilisation of shipyard capacity, and since KONGSBERG's products are installed late in the production phase, existing contracts do not generate revenues for two or three years after contracts are signed. KONGSBERG signed contracts for deliveries for 29 rigs in 2006. The rig boom has lasted longer than expected, and the boom is continuing. Since it began, KONGSBERG has won contracts for 40 rigs. The pace of contracting is expected to slow in 2007. KONGSBERG expects an increase in orders for floating production vessels, where we can potentially become a major equipment supplier.
Dynamic positioning is one of KONGSBERG's most important, most recognised products. New orders for dynamic positioning totalled about MNOK 1 000 in 2006.
To face increasing competition, especially in Asia, KONGSBERG must maintain continuous emphasis on improving products and offering more complete solutions. Operations in Asia must also be improved, and KONGSBERG expects to have 250 employees in this area by the end of 2007.
OUR MOST IMPORTANT PRODUCT AREAS ON THE OFFSHORE MARKET
Dynamic positioning systems
- Control systems that make it possible to keep a vessel/platform in the same position under demanding weather conditions
Navigation systems
- Equipment for ships' bridges
Automation and surveillance systems
- Systems for surveillance and for controlling engines, cargo, manoeuvring and propulsion on vessels
- Simulators and training systems are also available for most of the system products
Process automation
- Systems for the control and coordination of operations on an oil platform or a production vessel
- Safety systems for alarms or the interruption of production due to system malfunctions, when people are in danger or in the event of fire and gas leaks
- Dynamic process simulators to design and verify processing facilities and control systems
- Integrated operations
Subsea (underwater activities)
- High-technology hydroacoustic products for seabed surveying, subsea communication and positioning
MARKET DRIVERS AND TRENDS
Investment activity in the value chain
The investment level is cyclic and traditionally varies at a pace commensurate with the demand for and price of oil. Investment activity in the value chain varies considerably over time.
- Anticipated increase in future exploration, especially in the deepwater segment.
- A number of smaller fields are expected to be developed, provided oil prices remain at the current level.
- Increasingly more underwater activity drives the demand for hydroacoustics.
Growth in different geographical areas
Investments often vary considerably between different geographical areas. They are often determined by oil reserves and the level of exploration and production activities.
- Brazil and West Africa are international growth areas. In the not too distant future, the Barents Sea will be a growth area.
- The North Sea basin is increasingly considered a single area (which may make it more acceptable to foreign players).
- Several fields in the North Sea are expected to reach the tail production phase in the next five years.
New technology – new market niches
More demanding oil and gas fields create new market niches. This generates a need for new technological solutions.
- More tail production and focus on producing smaller fields.
- Better utilisation of existing infrastructure.
- Improved production technology and methods.