Fossil fuel companies, in their endeavour to speed up exploration, drilling, construction, and maintenance work turned to the use of heavy-duty underwater drones known as remotely operated vehicles, or ROVs, to keep their wells afloat. These came to be known as drones. Till recent times, oil and gas kept robots moving in more ways than one.
In the year 2015, the global market for ROV operations topped $3 billion, according to energy researcher Infield Systems. These poerations mostly covered contract work done by companies such as Oceaneering International, Subsea 7, and Fugo.
Following the worst slump in oil prices, investments in many offshore projects have been postponed or canceled. ROV business is encountering a cutting back. The Big Three drone operators are laying off thousands of workers and leaving hundreds of their seafaring robots.
Infield analyst Kieran O’Brien, who estimates that one-quarter to one-third of the 1,200-plus vehicles in service around the world is idle, says that the largest driver for ROVs has always been the offshore-rig markets. Everyone is just trying to stay alive at the moment.
Fugro’s director for investor relations, Catrien van Buttingha, says her company is working to diversify its income, 75 percent of which came from oil and gas last year. Subsea 7 declined to comment for this story ahead of its quarterly earnings; Oceaneering didn’t respond to a request for comment.
Independent contractors lead the field as a specialized expertise required to operate and maintain ROVs. In a typical set-up, one of the small-car-size robots is connected to a ship or rig by a tether that supplies power and hydraulic fluid. Fiber-optic cables send operators on the surface environmental data and live video, helping them guide the vehicle and its manipulator arms, which can grab valves or pipes.
Lay-offs
- Fugro, which has 11,597 employees, says this year’s layoffs have totaled 363 (following 1,577 last year), and more are coming.
- In June, Subsea 7 said it would let go of about 1,200 of its 9,200 employees by year end, on top of 2,500 cut in the second half of last year.
- In April, Norwegian newspaper Aftenbladet reported that Oceaneering’s local operation had cut 650 of its 1,750 jobs in a year and a half; the company had 11,000 employees globally at the end of last year.
- In 2016 we’re expecting to see, basically, the bottom of the market.
Ben Wilby, an analyst at researcher Douglas-Westwood, says that the markets that operators are now trying to push into include the installation and repair of undersea telecom cables and offshore wind farms, as well as marine salvage. That is a switch from years past, when renewable-energy companies were low priorities compared with the stream of work from fossil fuel businesses.
Fugro’s Van Buttingha says that there were years where we were so incredibly busy with oil and gas that anything else we would only do if we would have the opportunity.
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Source: Bloomberg
