Market Trends of Europe Offshore Helicopter Services Industry
This section covers the major market trends shaping the Europe Offshore Helicopters Market according to our research experts:
Oil & Gas Industry Sector to Dominate the Market
- The oil & gas industry sector has dominated the market in the past and is expected to do so in the forecast period too. The sector is the most popular source of revenue for the offshore helicopter industry in the region.
- Rising offshore exploration activities in countries like the United Kingdom and Norway are expected to help grow the market in the forecast period. Also, the majority of the oil & gas production in the region is from offshore fields, thereby requiring offshore helicopters for transportation of crew.
- It is estimated that the UKCS has around 1.5 billion BOE of resource in potentially commercial undeveloped discoveries (as of May 2018), many of which were previously considered to be too small or technically challenging.
- In May 2018, the Oil and Gas Authority (OGA) of the United Kingdom offered 123 licenses to over 229 blocks or part-blocks, to 61 companies, in the 30th offshore licensing round. The deep-water sector in the United Kingdom is highly challenging, not only in terms of the environment but also because of the aforementioned points. On the other hand, in the case of shallow water, though the major producers of oil and gas in the United Kingdom are facing similar challenges, it continues to attract investors due to the favorable tax structure.
- In 2018, there were considerably higher exploration activities compared to the previous two years. Fifty-three exploration wells were drilled, and 12 discoveries were made on the Norwegian continental shelf. The discoveries have a preliminary total estimate of 82 million standard cubic meters of recoverable oil equivalents. This gives an expected resource growth that is higher than in each of the previous three years.
- Therefore, the rising exploration activity to compensate for declining oil & gas production, and favorable government policies are expected to drive the market in the forecast period.
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Norway to Dominate the Market
- Norway is expected to continue its dominance in the offshore helicopter market in the region in the coming years. The country has been very active in offshore exploration in recent years in a bid to increase its oil & gas production from newly discovered fields to compensate for declining production from mature fields.
- The Norwegian Petroleum Directorate has estimated that the undiscovered resources on the Norwegian shelf are at approximately 4 billion standard cubic meters (Sm3) of recoverable oil equivalents. This corresponds to around 47% of all the remaining resources on the shelf. Moreover, as per the Norwegian Petroleum Directorate (NPD), the exploration cost was about NOK 25.7 billion in 2018, representing a decline of approximately 43% from 2013 levels. The decline in exploration and drilling cost is expected to drive the exploration activity in the country during the forecast period, which in turn, is expected to drive the demand for offshore helicopters in the coming years.
- On the other hand, many of the ~500 facilities on the shelf are approaching the end of their expected lifespans. In the coming years, several of these facilities are likely to be shut down and decommissioned in a responsible manner, which may, in turn, result in creating the demand for offshore helicopter services during the coming years.
- In June 2019, the Norwegian Ministry of Petroleum and Energy announced its plans to open two areas for offshore wind development with a combined capacity of up to 3.5GW. Similarly, in August 2019, Equinor has stated that it is exploring the possibility of deploying floating offshore wind to power its oil and gas production platforms in Norway. The project is expected to consist of 11 wind turbines based on Equinor's floating offshore wind concept, Hywind. The 8 MW turbines are expected to have a combined capacity of 88 MW, enough to meet about 35% of the annual power demand of the five platforms.
- Therefore, the rising offshore oil & gas development and an increasing number of offshore wind farms in the country are expected to help grow the offshore helicopter services market in the country.
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