Deep Blue
The macro and micro drivers of subsea oil services

The word "subsea" no longer guarantees high growth – after years of rapid expansion, we
see subsea capex approaching a plateau of USD20bn a year. We think this is good news for
contractors, but investors need to be more selective. Until the next tranche of deepwater
growth is realised after 2010 from Brazil, Asia and West Africa, we think investors need to look
more for niche areas with higher growth or companies positioned to gain market share.
Our preferences are shifting to include more "opex" exposure, as well as pure "capex", to
play the growing installed base of subsea equipment. We think the subsea winners are likely
to be flexible and hybrid risers, floating production (FPSO), high-end installation, well
intervention/maintenance services and those contractors whose business models can best
serve the growing offshore aspirations of national oil companies.
These sector themes underpin our Overweight (V) view on Aker Solutions (target price
NOK190) and Overweight views on Technip (raising target price to EUR75 from EUR71) and
SBM Offshore (raising target price to EUR30 from EUR27). We also initiate coverage of FPSO
operator BW Offshore with an Overweight (V) rating and target price of NOK25 and subsea
flowlines pure play Wellstream with a Neutral (V) rating and target price of 1525p.

目录

1
Energy Equipment
Europe
19 May 2008
abc
Subsea - the companies 5
Investment summary 5
Differentiation across the subsea industry 8
Subsea equipment – capital goods in disguise 23
Financials & valuation 26
BW Offshore (Overweight-V) 26
BW Offshore (BWO.OL) Initiate coverage on O/W (V)
Target price NOK25 27
Financials & valuation 38
Wellstream Holdings (Neutral-V) 38
Wellstream (WSML.L) Initiate coverage on Neutral (V)
Target price GBP15.25 39
Financials & valuation 46
Technip (Overweight) 46
Technip (TECF.PA) Rating Overweight Target price raised
to EUR75 (from EUR71) 47
Financials & valuation 54
Aker Solutions (Overweight-V) 54
Aker Solutions (AKSO.OL) Rating Overweight (V) Target
price NOK190 55
Financials & valuation 62
SBM Offshore (Overweight) 62
SBM Offshore (SBMO.AS) Rating Overweight Target price
raised to EUR30 (from EUR27) 63
Deepwater: a macro view 67
Investment summary 67
The outlook for subsea capex 73
E&P capex survey – an update for 2008 86
The drivers of subsea 96
Investment summary 96
Valuations & financials 161
Disclosure appendix 196
Disclaimer 200