Energy Market Review 2025
Business models are reshaping as oil and gas producers are increasingly looking at the integration of renewables to reduce greenhouse gas (GHG) emissions from the extraction and production of oil and gas. Subsea cables are key enablers as existing offshore platforms are retrofitted with electrified equipment, new electrified platforms are switched on, and energy is transferred across an increasingly connected network.
Subsea cables are essential for transitioning offshore oil and gas platforms towards cleaner energy sources, enhancing operational efficiency and reducing environmental impacts.
Subsea cables enable four key opportunities for energy companies:
01
Subsea cables connect offshore platforms to onshore power grids, providing a reliable and continuous supply of electricity. This reduces the need for onboard generators, decreasing fuel consumption and emissions.
02
High-speed communication through subsea fiber-optic cables allows for real-time monitoring and remote control of offshore operations, enhancing safety and efficiency.
03
Subsea cables serve as interconnectors between offshore facilities, enabling the transfer of power and data between platforms, production sites and support vessels.
04
Subsea power cables are used to transfer remote, renewable energy to platforms, removing the reliance on fossil fuels.
While many of the technicalities of a dynamic subsea cable will be different to existing offshore risers or umbilicals, parallels can be drawn in the installation methodology and connection point technologies. Risk-resilient energy companies will have existing contingency plans in place for traditional fossil fuel operations, and in many cases, the concepts can be extended to electrified processes:
Contingency plans will be a critical thread in negotiations with insurers, giving markets confidence that the company is taking a proactive approach to risk management and revenue protection.
To unlock these core four benefits, project owners and operators need to build the most robust and resilient program. Optimizing cost and coverage will be critical, and it starts with understanding the risk profile, from construction to operation.
Construction phase
Subsea cable manufacturers and installers have full order books with lead times in the region of four years or more.
Most platforms require conversion from DC electricity to AC electricity, which comes at additional costs and question marks over return on investment.
One of the terminations is likely to be a dynamic cable. Dynamic cables are less proven technology and are subject to environmental forces and the risk of failure becomes higher.
It is likely the power cable will cross many pipelines and fiber-optic cables of third parties, cable crossings and creating additional liability exposures.
Operational phase
In connecting electrified platforms to an existing grid, there are more single points of failure. If an asset in the electrification network goes down, the disruption could be significant.
Operators are reliant on the construction phase being completed to a high standard. Faulty equipment or technology can create operational failures, with disruption extending beyond 90 days in some cases as vessels and repair crews are in high demand.
Operating more specialist equipment needs more specialist skills and attracting and retaining critical talent is a core issue. Without a skilled and trained workforce, the risk of failure, and disruption to operations and revenue flow, increases.
Subsea cables’ installation and maintenance require ongoing technological innovation and strategic management. But for energy companies that make the right risk decisions, backed by data, the opportunities to build a cleaner operating model can be substantial.
Contact our sector-focused specialists to find out how your business can supercharge your electrification strategy.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
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