Douglas-Westwood’s latest World Floating Production Market Report forecasts that, during 2014-2018, US$99 billion will be spent on floating production systems – an increase of 138% over the preceding five-year period.
Report author, Damilola Odufuwa, says: “FPSOs will form the largest segment of the market (80%) both in terms of units installed and forecast capital expenditure over the 2014-2018 period. Latin America accounts for 29% of the 139 installations forecast and 38% of the projected Capex.
“The FPS sector recovery following the 2008-2009 downturn continues steadily. A total of 54 units were ordered in 2011-2013 compared to 23 units during 2008-2009. There has been little growth in the annual value of installed units over the last four years; however, 2014 is expected to show a significant increase in the value of units deployed.
“The strong forecast growth is despite the industry still coming to terms with a number of demand-side and supply-side issues. The failure of Brazilian operator OGX in 2013 and the slow-down in overall upstream expenditure in 2014 will impact the market in the near-term. Likewise, the industry’s record in terms of project execution has been poor, with most projects delivered late and significantly over-budget. Some industry players are now suggesting a new approach is required.
“However, the long-term growth in the sector is underpinned by the continued exploitation of deep waters, marginal fields and fast-track/short term deployments. Deepwater FPS deployments are expected to total $68bn and account for over two-thirds of the total spend.”
Image: BP's Skarv FPSO, now operating offshore Norway.
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