Floating Production Market Recovers in 2017 with Over $15 Billion in Orders

NEWS RELEASE – December 12, 2017

                                                                           

In its 2018-2022 Floating Production Systems Outlook Report, Energy Maritime Associates (EMA), analyzed the activity in 2017, recent industry trends and conducted a sentiment survey to develop a forecast for all Floating Production Systems: FPSO, FLNG, FSRU, TLP, Spar, Semi, and FSO.

2017 Highlights:

  • Orders Resume. After almost two years without an order, 10 FPSOs have been awarded since Q4 2016.
  • Return of the mega-projects. ENI awarded the $5.4 billion EPCIC Coral South FLNG contract to Samsung, TechnipFMC, and JGC. Statoil sanctioned the $2.6 billion Johan Castberg FPSO. Sembcorp will construct the hull and SBM will provide the internal turret.
  • Record number of FSRUs ordered. Driven by yard discounts and new entrants, 11 FSRUs were awarded, including five on speculation.

 

(c)EMA 2018

What does the future hold?

  • Up to 173 Orders. Between 80-173 Floating Production Systems are expected over the next five years with a mid-case forecast of $94 billion to be spent on 124 units. The outlook has been adjusted slightly from last year, with a handful more FPSOs expected in the mid and high-case scenarios. FPSOs remain the largest segment with over 40% of orders and 2/3rds of capital expenditure. Close to $50 billion is expected to be spent on FPS projects in Brazil and Africa, driven by large, deepwater FPSOs as well as a few mid-size FLNG developments.
  • There are now 10 speculative FSRUs on order, in addition to one available unit. Additional FSRUs will begin coming off contract and it remains to be seen how easily they can find new employment.
  • Rise of the Redeployment – Three idle units were awarded new contracts this year (OSX-1 FPSO, Aoka Mizu FPSO, Maersk Inspirer MOPU). We expect this trend to continue, with redeployed units, particularly FPSOs, accounting for up to 25% of future awards. 46 Floating Production Systems are currently available – 21 FPSOs, 9 Production Semis, 6 FSOs, 5 MOPUs, 2 Spars, 1 FLNG, 1 FSRU, and 1 Production Barge. This is down five from last year due to redeployments and scrapping of many FPSOs including Armada Intrepid, Opportunity, and Marlim Sul. The number of idle units is expected to remain high, with another 39 units likely to come available within the next two years.

According to EMA’s Managing Director, David Boggs, “The floating production market experienced a gradual recovery in 2017, with total spending reaching levels last seen in 2014. After a two year pause, Petrobras resumed ordering production units and is expected to account for about a quarter of FPSO awards over at least the next five years. Confidence in deepwater developments returned as seen by sanction of projects including the Coral South FLNG, Johan Castberg FPSO, and SBM’s Fast4Ward speculative FPSO hull. Three idle units received new contracts, providing cost-effective solutions for challenged projects. At today’s oil price, there are an increasing number of viable offshore projects as a result of revised development plans, lower supply chain costs, and flexible commercial terms. The next few years provide a unique window of opportunity to sanction offshore developments and take advantage of record low drilling rates and adequate industry capacity.”

For further information or to speak with the author please contact EMA:

Yun Xu
Energy Maritime Associates Pte Ltd

Tel: +65.9177.1368 (Singapore)

Tel: +1.202.800.8390 (USA)

fps@energymaritimeassociates.com

 

2018-2022 Outlook Report: Table Of Contents

A. Introduction to Floating Production Systems (FPS)

  • Brief History of the Offshore Industry
  • FPS Life Cycle
  • FPS Unit Types
    • Floating Production, Storage and Offloading Units (FPSOs)
    • Tension Leg Platforms (TLPs
    • Single Point Anchor Reserve (Spars)
    • Floating Liquefied National Gas Units (FLNGs)
    • Floating Storage and Regassification Units (FSRUs)
    • Production Semisubmersibles (Semis)
    • Floating Storage and Offloading Vessels (FSOs)
    • Mobile Offshore Production Units (MOPUs)

B. Current Market Status

  • What Happened in 2017?
    • Project Awards
    • Project Deliveries
    • Decommissioned Units
  • What Does the Market Look Like as of Jan 2018?
    • On Order
    • Trend in Order Backlog
    • Available Floating Production Systems
    • FPS Units Likely to Cease Operations in 2018-2019
    • Projects in Planning Stage
  • Top Ten Lists
    • Top FPS Operators (Planning Pipeline)
    • Top FPS Owners
    • Top FPS Operators (Installed Units)
    • Top FLNG Owners
    • Top FPSO Owners
    • Top FPSO Owners by Water Depth (Installed Units)
    • Top FSO Owners
    • Top SPAR Owners
    • Top Production Semi Owners
    • Top FSRU Owners
    • Top TLP Owners

C. Underlying Market Drivers

  • Global Oil and Gas Demand Drivers
  • Long Term Energy Demand
  • Global Oil and Gas Supplies
  • Global Oil Price
  • U.S. Onshore Production and Investment
  • Offshore Drilling

D. Market Forecasts

  • Summary of 2018-2022 Forecast
  • Forecast Scenarios
  • FPSO Forecast
  • FLNG Forecast
  • FSRU Forecast
  • FSO Forecast
  • Production SEMI Forecast
  • SPAR Forecast
  • TLP Forecast
  • Forecast Appendix

E. Floating Production Systems Industry Survey

  • Survey of FPS industry executives (e.g. shipyards, oil companies, contractors, equipment manufacturers, finance) on the industry outlook and trends in the coming year.
  • Survey topics:
    • Activity Level in 2016 and Beyond
    • Impact of Low Oil Prices
    • How Long Industry Downturn will Persist
    • Most Attractive Growth Regions
    • FPS Types with Largest Growth Potential
    • Technologies for Growth
    • Greatest Growth Obstacles
    • Potential Bottlenecks
    • Project Award Challenges
    • Award of Newbuilt vs Conversion Units
    • Award of Leased vs Owned Units
    • Redeployment Potential

F. Contractor Focus

  • Leasing Contractors
    • Bluewater
    • Bumi Armada
    • BW Offshore (BWO)
    • MISC
    • MODEC
    • SBM
    • Teekay
    • Yinson
  • FSRU/FLNG Companies (Excelerate, Exmar, Golar, Hoegh)
    • Excelerate
    • Exmar
    • Golar LNG
    • Hoegh LNG
  • EPC Contractors
    • Chinese Yards
      • Cosco Shipping Heavy Industry (CSHI)
      • China Shipbuilding Industry Corporation (CSIC)
      • China State Shipbuilding Corporation (CSSC)
      • Wison Offshore & Marine
    • Korean Yards
      • Daewoo Shipbuilding & Marine Engineering (DSME)
      • Hyundai Heavy Industries (HHI)
      • Samsung Heavy Industries (SHI)
    • Southeast Asia Yards
      • Keppel
      • Malaysia Marine and Heavy Engineering (MMHE)
      • Sembcorp Marine (Jurong and Sembawang)

 

2018-2022 Outlook Report: List of Illustrations

Effect of Industry Down Turn- Responses from EMA Annaul FPS Industry Survey

(c) EMA, 2018

  • Fig 1. FPS Units > 1,500m by Year Installed
  • Fig 2. Installed FPS Units by Maximum Water Depth Over Time
  • Fig 3. Regional Distribution of Installed Units 1991-2000
  • Fig 4. Regional Distribution of Installed Units 2001-2010
  • Fig 5. Regional Distribution of Installed Units 2011-2017
  • Fig 6. FPS Awards in Relation to Oil Price
  • Fig 7. FPS Life Cycle Schematic
  • Fig 8. FPSO Schematic
  • Fig 9. Mooring Systems Comparison
  • Fig 10. Production Semi Schematic
  • Fig 11. TLP Schematic
  • Fig 12. SPAR Schematic
  • Fig 13. FLNG Schematic
  • Fig 14. FSRU Schematic
  • Fig 15 FSO Schematic
  • Fig 16. MOPU Schematic

B. Current Market Status

  • Fig 17. Units Awarded in 2016 and 2017 by FPS Type
  • Fig 18. Units Awarded in 2016 and 2017 by Capex
  • Fig 19. Awarded Units 2014-2017 by Quarter
  • Fig 20. Awarded Units 2014-2017 by Capex
  • Fig 21. Distribution of Units Awarded in 2017 by Type
  • Fig 22. Details for Units Awarded in 2017
  • Fig 23. Units Awarded in 2017 by Capital Cost
  • Fig 24. Units Awarded in 2017 by Yard
  • Fig 25. Units Awarded in 2017 by Operator Category
  • Fig 26. Units Delivered in 2017 by Region and Unit Type
  • Fig 27. Details of Units Delivered in 2017
  • Fig 29. Units Decommissioned in 2017
  • Fig 28. Units Delivered in 2017 by Operator Type
  • Fig 30. Total Installed Units by Type
  • Fig 31. Global Distribution of Installed Units by Type
  • Fig 32. Installed Units by FPS Type and Region
  • Fig 33. Table of Production and Storage Floaters by Type and Region
  • Fig 34. FPS Units On Order by Type and Region
  • Fig 35. FPS Units On Order by Name and Type
  • Fig 36. FPS Units Under Repair by Name and Type
  • Fig 37. Distribution of Units On Order by Destination
  • Fig 38. Distribution of Units On Order by Yard
  • Fig 39. FPS Order Book by Unit Type
  • Fig 40. FPS Order Book 1997-2017
  • Fig 41. Available FPS Units by Year of Lay-Up and Type
  • Fig 42. Available FPS Units by Year of Lay-Up, Type and Status
  • Fig 43. Possible Available FPS Units 2018-2019
  • Fig 44. Projects in Planning Process
  • Fig 45. Projects in Planning Process by Region
  • Fig 46. Projects in Planning Process by Region and Water Depth
  • Fig 47. Top Operators by Projects in Planning Process
  • Fig 48. Top FPS Unit Owners
  • Fig 49. Top Operators by Units Leased or Owned
  • Fig 50. Top FLNG Owners
  • Fig 51. Top FPSO Owners
  • Fig 52. Top FPSO Owners by Water Depth
  • Fig 53. Top FSO Owners
  • Fig 54. Top Spar Owners
  • Fig 55. Top Semi Owners
  • Fig 56. Top FSRU Owners
  • Fig 57. Top TLP Owners

C. Underlying Market Drivers

  • Fig 58. World Energy Consumption
  • Fig 59. Growth in Primary Energy Demand by region 2015-2040
  • Fig 60. Energy Consumption by Fuel Type 2015-2040
  • Fig 61. Average Oil Demand Growth
  • Fig 62. Average Oil Demand Growth in Developing Countries
  • Fig 63. Sectoral Share of Liquid Consumption
  • Fig 64. Oil Demand by Sector in Developing Countries 2016 , 2040
  • Fig 65. Natural Gas Demand by Major Regions 2015-2040
  • Fig 66. World Natural Gas Consumption 1990-2040
  • Fig 67. Natural Gas Consumption by Sector 2010-2040
  • Fig 68. Growth in Energy Demand by Type 2015-2040
  • Fig 69. Floating Offshore Wind Market
  • Fig 70. EIA vs OPEC Oil Production Forecasts
  • Fig 71. Us Tight Oil Production 2010-2040
  • Fig 72. US Oil and Gas Production
  • Fig 73. LNG Importers and Exporters by 2040
  • Fig 74. WTI and Brent Spot Price by Month
  • Fig 75. Brent Futures Trading Contracts Q-o-Q
  • Fig 76. Brent Futures Trading Contracts Y-o-Y
  • Fig 77. Henry Hub Spot Gas Prices
  • Fig 78. Henry Hub Natural Gas Price
  • Fig 79. Henry Hub Futures Contracts Y-o-Y
  • Fig 80. N. American Rotary Count vs Oil Price
  • Fig 81. Rig Productivity in US Shale Oil Fields
  • Fig 82. Permian Basin Well Productivity
  • Fig 83. Shale Peer Group Cost Breakdown
  • Fig 84. SE Asia Jackups Utilization and Day Rate
  • Fig 85. Drillship Utilization and Day Rate
  • Fig 86. Semisub Utilization and Day Rate

D. Market Forecasts

  • Fig 87. FPS Forecast by Unit Type
  • Fig 88. Capex Forecast by Region and FPS Type
  • Fig 89. Growth of FPS Inventory
  • Fig 90. 2018-2022 Forecast by FPS Type and Capex
  • Fig 91. Historical Growth of FPSO Inventory
  • Fig 92. FPSO Awards 2003-2022
  • Fig 93. Forecast of FPSO Awards per Year (2018-2022)
  • Fig 94. FPSO Awards 2018-2022 with Petrobras’ Proportion
  • Fig 95. FPSO Forecast by Hull Type
  • Fig 96. FPSO Forecast by Hull Type
  • Fig 97. FPSO Forecast by Production Capacity
  • Fig 98. Leased FPSO Forecast by Production Capacity
  • Fig 99. FPSO Capex by Hull Type
  • Fig 100. FPSO Awards by Region
  • Fig 101. FPSO Capex by Production Ranges and Hull Type
  • Fig 102. FPSO Orders by Production Ranges and Hull Type
  • Fig 103. FLNG Orders and Deliveries
  • Fig 104. FLNG Orders by Unit Size 2018-2022
  • Fig 105. FLNG Forecast and Capex by Unit Size 2018-2022
  • Fig 106. Historical Growth of FSRU Inventory
  • Fig 107. Historical FSRU Orders
  • Fig 108. FSRU Forecast by Unit Size 2018-2022
  • Fig 109. FSRU Forecast and Total Capex by Unit Size 2018-2022
  • Fig 110. Historical FSO Inventory
  • Fig 111. Historical FSO Orders
  • Fig 112. FSO Forecast by Type 2018-2022
  • Fig 113. FSO Forecast and Capex by Type 2018-2022
  • Fig 114. Historical Inventory of Semis
  • Fig 115. Historical Semi Orders
  • Fig 116. Semi Forecast by Type 2018-2022
  • Fig 117. Semi Forecast and Capex by Type 2018-2022
  • Fig 118. Historical Inventory of Spars
  • Fig 119. Historical Spar Orders
  • Fig 120. Spar Forecast by Type 2018-2022
  • Fig 121. Spar Forecast and Capex by Type 2018-2022
  • Fig 122. Historical TLP Inventory
  • Fig 123. Historical TLP Orders
  • Fig 124. TLP Forecast by Type 2018-2022
  • Fig 125. TLP Forecast and Capex by Type 2018-2022
  • Fig 126. Forecast Appendix

E. Floating Production Systems Industry Survey

  • Fig 127. Confidence in Business Outlook in the Next 12 Months
  • Fig 128. Expected Length of Downturn
  • Fig 129. Impact of Downturn
  • Fig 130. Activity Levels in the Next 12-24 Months
  • Fig 131. Largest Obstacle for Awards in the Next 12-24 Months
  • Fig 132. Capacity Constraints in the Next 12-24 Months
  • Fig 133. Most Attractive Regions in the Next 5-10 Years
  • Fig 134. FPS Type with the Highest Growth Opportunities
  • Fig 135. Technologies with the Largest Impact
  • Fig 136. Outlook for Leased, Newbuilt, and Redeployed Units
  • Fig 137. Contractors Participation in Upstream Field Development
  • Fig 138. Sustainability of Offshore Oil and Gas Development
  • Fig 139. Survey Profile -Business
  • Fig 140. Survey Profile – Position

F. Contractor Focus

  • Fig 141. Top Leasing Contractors and Their Fleets
  • Fig 142. Top Leasing Contractors and Their Fleets by Region
  • Fig 143. Bluewater- Contracts by Field Operator
  • Fig 144. Bluewater- Asset Distribution by Region
  • Fig 145. Bluewater- Fleet Status
  • Fig 146. Bumi Armada- Contracts by Field Operator
  • Fig 147. Bumi Armada- Asset Distribution by Region
  • Fig 148. Bumi Armada- Fleet Status
  • Fig 149. BWO- Contracts by Field Operator
  • Fig 150. BWO- Asset Distribution by Region
  • Fig 151. BWO- Fleet Status
  • Fig 152. MISC- Contracts by Field Operator
  • Fig 153. MISC- Asset Distribution by Region
  • Fig 154. MISC- Fleet Status
  • Fig 155. Modec- Contracts by Operator
  • Fig 156. Modec- Asset Distribution by Region
  • Fig 157. Modec- Fleet Status
  • Fig 158. SBM- Contracts by Field Operator
  • Fig 159. SBM- Asset Distribution by Region
  • Fig 160. SBM- Fleet Status
  • Fig 161. Teekay- Contracts by Field Operator
  • Fig 162. Teekay- Asset Distribution by Region
  • Fig 163. Teekay- Fleet Status
  • Fig 164. Yinson- Contracts by Field Operator
  • Fig 165. Yinson- Asset Distribution by Region
  • Fig 166. Yinson- Fleet Status
  • Fig 167. Excelerate- Contracts by Field Operator
  • Fig 168. Excelerate- Asset Distribution by Region
  • Fig 169. Excelerate- Fleet Status
  • Fig 170. Exmar- Fleet Status
  • Fig 171. Golar- Contracts by Operator
  • Fig 172. Golar- Asset Distribution by Region
  • Fig 173. Golar- Fleet Status
  • Fig 174. Hoegh- Contracts by Operator
  • Fig 175. Hoegh- Asset Distribution by Region
  • Fig 176. Hoegh- Fleet Status
  • Fig 177. EPC Contractor Orderbook by Type
  • Fig 178. SEA Yards – Client Distribution
  • Fig 179. Korean Yards – Client Distribution
  • Fig 180. Chinese Yards – Client Distribution
  • Fig 181. SEA Yards – Order Destination
  • Fig 182. Korean Yards – Order Destination
  • Fig 183. Chinese Yards – Order Destination
  • Fig 184. COSCO – Orders by Client
  • Fig 186. COSCO – Order Backlog
  • Fig 185. COSCO – Order Destination
  • Fig 187. CSIC – Orders by Client
  • Fig 188. CSIC- Order Destination
  • Fig 189. CSIC – Order Backlog
  • Fig 190. CSSC – Orders by Client
  • Fig 191. CSSC – Order Destination
  • Fig 192. CSSC – Order Backlog
  • Fig 193. Wison – Orders by Client
  • Fig 194. Wison – Order Destination
  • Fig 195. Wison – Order Backlog
  • Fig 196. Daewoo – Orders by Client
  • Fig 197. Daewoo – Order Destination
  • Fig 198. Daewoo – Order Backlog
  • Fig 199. Hyundai – Orders by Client
  • Fig 200. Hyundai – Order Destination
  • Fig 201. Hyundai – Order Backlog
  • Fig 202. Samsung – Orders by Client
  • Fig 203. Samsung – Order Destination
  • Fig 204. Samsung – Order Backlog
  • Fig 205. Keppel – Orders by Client
  • Fig 206. Keppel – Order Destination
  • Fig 207. Keppel – Order Backlog
  • Fig 208. MMHE – Orders by Client
  • Fig 209. MMHE – Order Destination
  • Fig 210. MMHE – Order Backlog
  • Fig 211. Sembcorp – Orders by Client
  • Fig 212. Sembcorp – Order Destination
  • Fig 213. Sembcorp – Order Backlog