While we have seen forecasting of as many as 24 Floating, Production, Storage and Offloading units (FPSO) awards expected by 2020, from our experience, we believe not everything will proceed as planned. Our 2019-2023 Floating Production Systems Outlook Report, includes a mid-case forecast of 12 FPSO awards in 2019 and 14 in 2020. So far, seven FPSOs have been awarded in 2019.
As companies have recently proven to be disciplined in sanctioning new investments, coupled with recent world uncertainty, and normal delays, we believe our mid-case forecast of 19 additional FPSO awards by end 2020 to be reasonable and realistic. Our annual forecasts include a low, medium, and high case, and anticipated awards range between 8 and 18. Our best case assumes a very high oil price and no capacity or financial constraints. This forecast will be updated in our 2020-2024 Floating Production Systems Outlook Report, released in December.
South America is currently the most active region for future floating projects, driven by Brazil and Guyana. Petrobras is the dominant player in Brazil, but a number of operators including Shell, Equinor, and Enauta have plans for new floaters. Activity is increasing in other regions as well, particularly the North Sea and Gulf of Mexico, where FPSOs and production semisubmersibles will be required.
Floating Production orders will continue to increase over the next year, however cumbersome decision-making processes, government approvals, and financing will temper the speed at which they are sanctioned.
The climate for offshore drilling is improving and exploratory drilling is on the rise. This segment’s market strengthening has energized industry observers, with many now anticipating upticks in offshore development activity.