Choices Impacting an Oil & Gas Submarine Cable System Implementation: A Brief Overview

Wayne Nielsen discusses the choices impacting the implementation of submarine cable systems to offshore oil & gas platforms.By Wayne Nielsen
September 21, 2020


Change is coming albeit slowly to the Oil & Gas submarine cable market. Commercialization of existing cable systems started years ago in the North Sea is now happening anew in the Gulf of Mexico with the upcoming acquisition of BP GoM by Tampnet. Will other oil basins also move from concession-ownership to managed service? Only time will tell.

In spite of COVID-19, system growth remains strong for the foreseeable future and should maintain this level as oil exploration around the world continues to see renewed activity. The continued move to remote monitoring and automation combined with the need to process large data sets in onshore data centers cements the necessity of fiber for future offshore projects. According to the 2019 Offshore Oil & Gas Submarine Telecoms Market Sector Report, potential investment of $2.6 billion in submarine fiber systems is expected through 2022 or so – more than doubling existing investment amounts. However, it is still unclear how the impact of the 2020 COVID-19 pandemic on oil prices and subsequent infrastructure investment will impact the timing of this investment.

Digital connectivity for offshore production is a strategic initiative within the Oil & Gas industry. A successful implementation extends their reliability and sustained access to the high capacity digital infrastructure, and subsea fiber plays a vital role.


There are three primary options available to the Oil & Gas company for the ownership and operating of a submarine cable system serving offshore assets:

  • Dedicated system – typically employed when a user requires accessing fiber in a timely and long-term manner, which is critical to their business and more ideal alternative models are not readily available.
  • Consortium – useful when a basin is developing, and future assets locations are questionable, or when there is a desire for a level of guaranteed ownership and access rights.
  • Managed service – provided by a third party service company offering access to multiple users.

Ownership models are analyzed on a case-by-case basis, as they can evolve over time into joint ownership consortiums, managed services or others as economics and risk management allow. In both the North Sea and Gulf of Mexico, for instance, we have seen the evolution of dedicated systems being acquired or spun-out into third-party managed service by the originating Oil & Gas company. As such, the managed service has the ability to bring in new customers and expand to its fullest potential well beyond the original dedicated system in a particular basin.

To continue reading the rest of this article, please read it in Issue 114 of the SubTel Forum Magazine on page 62 or on our archive site here.