Near-term prospects for the deepwater sector are excellent. That’s the conclusion of an in-depth market analysis of the floating production market just completed by IMA/WER in the August 2021 Floating Production Systems Report.
Asked what is driving the positive sentiment, WER’s Chairman Jim McCaul explains that, “Oil demand growth is expected to continue at a strong pace, OPEC+ appears to be able to successfully keep oil supply under control, and crude inventory has been falling -- setting the scene for crude prices to remain in the $60 to $70+ range over the near-term.”
McCaul goes on to add that, “Recent deepwater contracting activity has been very strong. Two large production floaters were ordered over the past month – a production semi for the GOM and an FPSO for Brazil -- the 8th and 9th production floater ordered thus far this year."
This is quite a change from 2020, where only four FPSOs were ordered during the entire year.
Looking forward, McCaul says, the number of production floater contracts in the near-term queue remains at a record high, with 25 floater contracts lined up for award over the next 18 months.
"They include 21 FPSO and four production semi contracts. These are all solid prospects with a high likelihood to move forward to EPC contract by early-2023, given the expected strong market conditions. The only barrier could be the ability of the supply chain to digest this record volume of orders over the next 18 months," McCaul says.
All this and more is discussed in detail in the August IMA/WER report. Accompanying excel spreadsheets provide the report data in sortable format. Information is current as of August 26.
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