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2017 turnaround for FPS segment

Written by  OE Staff Friday, 10 November 2017 02:46

The floating production systems (FPS) has seen a return to activity in 2017, says analysts Westwood Global Energy Group. 

The firm says that in 2016 no FPS units were ordered. With two months of the year remaining, 11 units have been ordered this year, totalling US$45 billion in orders, including Petrobras’ first order in two years for the Sépia field (with Modec), offshore Brazil. This morning, that number became 12, with Statoil signing a letter of intent with Sembcorp for a hull and integrated living quarters for its Johan Castberg development in the Barents Sea.

"This increase is driven by increased confidence in the sector and materially lower field development costs," says Westwood.

Other notable FPS unit orders include the initial floating production, storage and offloading vessel for ExxonMobil's Liza field offshore Guyana (SBM Offshore) and the Big Dog (Mad Dog phase 2) floating production and storage system, for BP in the US Gulf of Mexico (Samsung Heavy Industries).  

Numerous projects have also moved towards final investment decision as operators seek to capitalize on lower supplier prices and replace reserves. Floating production awards expected in the market soon includes FPSOs for ONGC, an FPSO for the delayed Rosebank development, west of Shetland, and Eni's ZabaZaba project off Nigeria.

A total of 10 units have come onstream in 2017 to daye, including high-capex units that were ordered prior to the downturn, such as the P-66 and Armada Olombendo  (for Eni on the East Hub Development project, Angola) FPSOs. 

Latin America will remain dominant in the sector, accounting for 32% of capex and 36% of installations. 

Installation expenditure will be diverse, with Africa, Asia, North America, and Western Europe all forecast to have installation expenditure of over $5 billion. 

Westwood expects 2017 and 2018 to dominate installation expenditure. 

 
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