Umbilical Market size is projected to grow at a healthy CAGR over 2021-2027 powered by the increasing demand for oil and gas worldwide. To meet this demand, oil & gas companies are ramping up exploration & production efforts, creating a substantial demand for umbilicals and other equipment. O&G exploration and production is becoming a critical challenge, particularly in subsea and offshore projects. Since oil & gas developments are moving further offshore into deeper waters, their technical challenges are also growing, further amplifying the technology demand.
The decline in crude oil prices is putting more pressure on the economies to implement more cost-effective well practices. These concerns along with the ongoing efforts to restore mature fields will positively impact the global umbilical market outlook.
Umbilicals are cable systems that connect offshore facilities such as a ship, a subsea flow station, or a floating oil rig to the surface or a logistic source. These cables establish a link between the surface and the seafloor equipment for heat, power, or controls. They can provide electric and fiber-optic signals, chemical and hydraulic injections, as well as electric power to the subsea or offshore unit.
Considering the type, the market for electro hydraulic umbilicals is expected to witness notable growth through 2027. These cable systems are deployed to activate subsea wells and pump chemicals or fluids into the productions streams. Hydro-electric umbilical systems are also used to connect the subsea control panels for transmitting electrical power as well as real-time information about the temperature, pressure, and subsea integrity to the subsea equipment. The increasing volume of oil & gas exploration and production activities across the world indicates that hydro-electric umbilical technology demand will surge over the forthcoming years.
By application, the offshore segment is likely to acquire a significant share of the umbilical industry. This is attributable to the growing number of oil & gas and clean energy projects offshore. Umbilical manufacturers are witnessing tremendous opportunities across the offshore segment. For instance, in August 2021, Prysmian Group had bagged a USD 78 million contract from Petrobras to supply 200 km of deep-water electro hydraulic steel tube and thermoplastic umbilical systems and associated logistics services for new brownfield and greenfield projects offshore Brazil. As part of the deal, Prysmian had agreed to engineer, test, and supply the umbilicals over 2022-2025 from its Vila Velha, Brazil facility.
In terms of the regional outlook, Europe umbilical market in could grow at a steady rate between 2021 and 2027. The growing number of onshore, offshore, and subsea projects are creating promising opportunities for the regional suppliers. In September 2020, for example, JDR Cable Systems had secured a deal from Subsea 7 to supply a 9.3 km production and control umbilical along with other equipment for the Elgood field development in the southern North Sea.
Prysmian S.p.A., JDR Cable Systems, Nexans Cabling Group, Parker Hannifin Corp, Subsea 7 S.A., Oceaneering International, Hydro Group plc, Aker Solutions ASA, Sound Ocean Systems, LS Cable & System, Actuant Corporatio, Technip, Umbilicals International, and Tyco Electronic Corporation are among the notable names in the umbilical industry. Umbilical manufacturers globally are witnessing new market opportunities due to the rise in O&G sector activities. Citing an instance, in May 2021, Nexans was selected by the Subsea Integration Alliance (SIA) to engineer, fabricate, test, and supply 44 km of steel tube umbilical cables and accessories for the Bacalhau oil field development offshore Brazil.
The global umbilical industry has been impacted due to the disruptions in oil & gas exploration and production projects in wake of the COVID-19 pandemic. Stricter protocols and containment measures to curb the spread of the coronavirus have impacted O&G sector operations worldwide. Additionally, the global economic slowdown and supply chain disruptions have had a considerable impact over the umbilical market. Expectations for the recovery of oil and gas market depends on the removal of COVID-19 related lockdowns and.