From May 1- May 4, the yearly Offshore Technology Conference (OTC) was hosted at the NRG stadium in Houston. Despite the current price of oil at $40[/bbl], a lot of Offshore Technology Companies were still present at this event. Organized by the IRO (The association of Dutch suppliers in the oil and gas industry and offshore renewable industry), the Dutch presence was remarkable again this year with 46 Dutch companies, an estimated amount of 500 Dutch visitors and a very noticeable orange Holland Pavilion, spread out over 1000 m2 in the NRG Stadium.
The overall conclusion of the exhibitors at the OTC is that the conference is better visited this year in comparison to last year. The OTC is seen as an event where you have to be present as an Offshore company, since high-level representatives of the companies will be present on the exhibition as well. However, the first analyses show that the event is that the attendance of the OTC fell again this year. Just under 65,000 people wandered the exhibits at Houston's NRG Park, down from 68,000 last year and 95,000 in 2015. Attendance has plunged nearly 40 percent since hitting a record 108,000 in 2014, the peak of the last oil boom.
Although the general opinion is less pessimistic than last year ‘it is getting better’, most companies are moderately optimistic at best about a possible surplus in 2017. For a lot of companies, cost reducing measurements are still necessary in 2017, including downsizing of the workforce. Talking to the representatives of the different companies, a few trends can be analyzed:
- The exploration and completing of new oil and gas wells is on hold. For companies with a complete dependency on those activities, these are difficult times. There’s lot of overcapacity at this moment.
- Because of the low price of oil, there’s a huge pressure to keep the cost price as low as possible. All the activities need to be completed at minimal costs. Companies with cost-cutting, innovative ideas are the most likely to be hired for the job. Dutch companies are well equipped for those cost-cutting ideas.
- A lot of Dutch companies are actively involved in the installation of Offshore Wind farms. This market is relatively new and is developing at a fast pace, especially in the North Sea. The Offshore Wind farm market in North-East America is expected to be an import export market for the Netherlands.
- Another trend is the decommissioning of oil platforms. After the useful life of an oil and gas platform, it must be decommissioned (i.e., dismantled and disposed of). A lot of the Dutch exhibitions at the OTC are equipped for the decommissioning of the platforms, which creates a growing number of projects for now and in the future. Two examples of this decommission market are Heerema and Allseas who both recently scored a big project in this market.