Subsea demand is strong and getting stronger, with a backlog for orders at the highest level in more than four years for Houston’s FMC Technologies Inc., the company reported Wednesday.

Total operating revenue in 3Q2014 reached $2 billion, 15% higher year/year. Total inbound orders for the subsea and surface divisions were $1.7 billion, with $1.1 billion alone in subsea technologies orders.

The subsea technology backlog reached $5.9 billion, with quarterly revenue in the unit up 16% to $1.3 billion from $1.1 billion. The subsea segment earned $204 million in the quarter, versus $121 million in the year-ago period.

“Quarterly subsea margins are at the highest level we have delivered in over four years,” said CEO John Gremp. “Our focus on execution, the strength of our backlog, and the growth of our subsea service revenue has positioned us to continue delivering mid-teen level margins.”

FMC provides subsea equipment and technologies to explore, drill and develop offshore oil and gas fields, including high-pressure, high-temperature trees and wellheads, subsea controls and systems, and production optimization services. It has about 30 projects ongoing in the Gulf of Mexico (GOM) today and alliances with a who’s who of the exploration and production world.

Profits in the surface wellhead division, which provides hydraulic fracturing fluids and technology, also were higher, jumping to $109 million from $75 million in 3Q2013, lifted by North American growth. The business unit supplies completion and production wellhead systems for onshore and offshore applications.

During a conference call with analysts, Gremp was asked what the company would be keeping an eye on in 2015 in terms of the market.

“The things we are focused on are strengthening and expanding our partnerships with operators,” he said. “This is the company’s foundation in the deepwater. Regardless of what happens next year or the year after, that’s a big deal to us. That means something to these operators that are going to use FMC Technologies regardless of the pace that they develop their deepwater portfolios.

“We will be adding partnerships, expanding and strengthening them,” said the CEO. “That’s something we can control. The second thing is technology. You can’t be a leader in subsea if you are not a leader in technology.” He said FMC’s research and development team in Houston was “focused on rolling out the next-generation cost effective subsea equipment.

“Execution matters to us and it matters to our partners. The best way to destroy returns on a deepwater project is to miss the delivery date affecting first oil and to have big cost overruns. We want to shorten the lead times, support our partners and improve returns…Those things are within our control and we expect 2015 and 2016 to be better years for us in each of these categories.”

Subsea vessel demand, lifted in part by big discoveries in the deepwater GOM, are set to experience annual growth of around 7% to 2019, with operating expenditures of $122 billion, a forecast by Douglas-Westwood has determined.

The consultant’s World Subsea Vessel Operations Market Forecast found that Asia, in part because of huge liquefied natural gas (LNG) export growth, would be the single largest market, with 20% of the total global expenditures over the next five years, followed by the deepwater GOM, West Africa and Brazil, which would capture around 40% of the total spend.

“Average vessel days are expected to become more expensive due to increasing demand for higher specification assets as field developments move toward deeper waters, as well as more stringent customer requirements for inspection repair and maintenance (IRM) work,” said Douglas-Westwood’s Chen Wei, who authored the subsea report. “The subsea vessel industry is currently experiencing a major build cycle with over 54% of the active fleet delivered over the past eight years. There are also an additional 115 vessels under construction, an order book-to-fleet ratio of 21%.”

Field development and IRM should be the primary drivers of global spend, with $45 billion overall to be shelled out between 2015 and 2019. Vessel demand over the period is forecast to be more than 184,000 days. The IRM sector is expected to account for almost 40% of the spending in the period, “with a growing installed base of offshore infrastructure combined,” and a “requirement for higher specification vessels” driving a compound annual growth rate (CAGR) of around 9.5%.

The Australia and Asia-Pacific region has the fastest growth rate of all with a CAGR of 21% through the forecast period on a backlog of “high profile gas developments” to support ambitious LNG export commitments.