SINGAPORE – In its 2020-2024 Floating Production Systems Outlook Report, Energy Maritime Associates (EMA), analyzed the activity in 2019, recent industry trends and conducted a sentiment survey to develop a forecast for all types of Floating Production Systems including FPSO, FLNG, FSRU, TLP, Spar, Semi, and FSO.
Orders Continue. 19 contracts for Floating Production units were awarded in 2019, including 13 FPSOs, 3 FSRUs, 2 Production Semis, and 1 MOPU. By comparison, there were 11 FPSO orders last year and only 7 in 2017.
Busy Times for Leading Contractors. There are 25 FPSOs currently on order. Two contractors are responsible for almost half of all the backlog: Modec is executing seven projects, while SBM has five units in progress, including two Fast4Ward hulls ordered on speculation.
Let the Good Times Roll. In EMA’s seventh annual sentiment survey, 75% of respondents expected the Floating Production Sector upturn to last at least two more years, with 44% believing it was even more sustainable and could last three years or longer.
Up to 175 Orders - between 81-175 Floating Production Systems are expected over the next five years with a mid-case forecast of $99 billion to be spent on 125 units. The outlook has been adjusted slightly from last year, with a handful more FPSOs expected in the high-case scenarios. FPSOs remain the largest segment with over 40% of orders and 3/4th of capital expenditure. Close to $30 billion is expected to be spent on FPS projects in Brazil, driven by massive, deepwater FPSOs.
Rise of the Redeployment – four existing units were awarded new contracts this year (FPSOs Jotun A, Allan, MTC Ledang, as well as MOL FSRU Challenger). We expect this trend to continue, with redeployed units, particularly FPSOs, accounting for up to 25% of future awards.
45 Floating Production Systems are currently available – 25 FPSOs, 6 Production Semis, 6 FSOs, 5 MOPUs, 4 FSRUs, 2 FSOs, 1 Spars, 1 TLP, and 1 Production Barge. This is down five from the peak in 2017 due to redeployments and recycling of older FPSOs. The number of idle units is expected to remain high, with another 62 that could possibly come available within the next two years.
According to EMA’s Managing Director, David Boggs, “The floating production market experienced a strong 2019, with the highest level of FPSO awards in seven years. Brazil is firmly back, with five orders this year and is expected to account for 1/3rd of total spending over the next five years. Confidence has returned, particularly for the leading contractors, which are managing record orderbooks. SBM’s speculative Fast4Ward program has been a success with contracts secured for its first three FPSO hulls and orders placed for two more at the end of 2019. Oil companies now see attractive opportunities in offshore, particularly deepwater Brazil, Gulf of Mexico, and Australia. EMA has identified 30 projects that could be sanctioned within the next year and now the question is how will they be executed.”
About Energy Maritime Associates The Floating Production Systems Report is a must read for anyone requiring trustworthy analysis of the FPSO sector to effect better decision making, assess business risk, and provide insight into project alternatives.
Since 1996, EMA has been providing independent, expert analysis of the FPSO market with an unbiased view. We pride ourselves on the accuracy of information provided built through an extensive network of industry contacts, and our depth of knowledge in floating production. Trusted by more than 200 clients worldwide, EMA serves the entire FPSO market including E&P companies, service providers, capital investment firms, and asset and facility owners. Please contact us to discuss your questions about the floating production sector.
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Energy Maritime Associates (EMA), analyzed the activity in 2019, recent industry trends and conducted a sentiment survey to develop a forecast for all types of Floating Production Systems including FPSO, FLNG, FSRU, TLP, Spar, Semi, and FSO.