The market for floating production systems is booming, according to World Energy Reports' (WER) latest assessment of activity and developments in the offshore oil and gas market.
“Business conditions and market sentiment in the deepwater sector have seldom been so positive,” said Jim McCaul, founder and principal analyst of WER.
“Major upstream operators continue to rake in record cash and spending on new upstream projects has been ramping up,” McCaul said. “Activity has returned to levels last seen before the 2008 global financial meltdown. The floating production sector is a very bullish market at the moment.”
WER's recently completed report identifies and examines 40 floating production projects in the planning queue ready to go to the engineering, procurement and construction (EPC) contract stage within the next 18 months. In the queue are more than 25 Floating production storage and offloading (FPSO) unit contracts, several production semis and eight floating liquefied natural gas (FLNG) facilities. Another 90+ production floater contracts are in the planning stage for award 18 to 60 months out. Details for all these projects are in the WER report.
“Ability of the supply chain to absorb the large number of contracts for new floating production systems over this short time period will be a major constraint,” McCaul said. “The orderbook for FPSOs, production semis and FLNGs now stands at 40 units and cost growth and delays are being increasingly reported. I expect a lot more cost escalation and delivery delays as the order backlog grows.”