Though rising oil and gas prices are causing havoc in the global economy, they have proved a windfall for one sector: China’s vast offshore engineering equipment industry.
The increase in global fossil fuel prices over the past few years has sparked a surge in offshore investment, which has boosted the revenues of Chinese companies that make the heavy-duty machinery used to extract that energy – from floating oil rigs to wind turbine installation vessels.
“We are quite optimistic about the future, but it hasn’t fully reflected in new orders yet because Chinese shipyards are already running at full capacity,” said Ding Zhicheng, a chief engineer at the China Association of the National Shipbuilding Industry, at a shipping industry expo in Tianjin on Wednesday.
China is the world’s dominant producer of offshore engineering equipment, a huge field that spans everything from deepwater drilling machinery to specialist support ships. Chinese firms have accounted for over 50 per cent of the global market for the past several years, according to China’s Ministry of Natural Resources.
The industry fell into a slump in the late 2010s, but demand for offshore equipment is now rebounding amid a revival in offshore oil and gas exploration. Global orders soared to US$22 billion per year on average between 2021 and 2025, nearly double the level seen during the previous five years, according to Ding.