All the evidence suggests 2016 will be another extremely difficult year for the offshore service industry. Upstream capex budget cuts will be deeper and project sanctions will remain rare. As contractors scramble for the few greenfield opportunities available, cost reduction pressures will continue to squeeze their already tight margins. The most vulnerable companies in 2016 will be asset heavy EPIC contractors, seismic and drilling companies. Wood Mackenzie and Infield Systems have highlighted the events that will shape the offshore service sector in 2016.
Table of contents
Continued project deferral and cost reduction pressure
Engineering firms best placed to weather the storm in 2016
Life of Field service now critical to backlog defence: Balance shifting from capex to opex
Consolidation & M&A activity expected to pick up in late 2016