With more than 30 FPSO projects set to reach a final investment decision (FID) by 2021, concerns about commercial viability are starting to wane. In advance of the FPSO World Congress in Singapore this September, we surveyed industry leaders about the future of the sector.
Our findings indicate market conditions have laid the foundation for what respondents described as “scaled-down developments” that include smaller FPSO units, “phased development” of platforms and an increase in drilling operations.
Since the crash of 2015, the average time required to develop an FPSO has decreased from 36 months to 26. The cost associated with the development of all floaters, from FSRUs to FLNGs, has fallen as well.
There have been 105 projects sanctioned for 2019, which represents an all-time high. The total will fall to 90 in 2020, however, which is in-line with levels last seen in 2018. Growth in one segment of the FPSO sector that shows no signs of abating is the offshore facility leasing market, which is poised to outpace the rest of the orderbook, drilling activity, shale exploration and onshore infrastructure.
In terms of FPSO tonnage that will enter the market between 2019 and 2022, 33 new vessels are scheduled for delivery during this period. Demand remains strongest in South America, with 15 FPSOs to be sanctioned – followed by six in Asia; five in Africa and Europe, respectively; and a further two in Australia.
To learn more about the state of the FPSO market in 2019, and beyond, check out this infographic. Further detail can be found in this report which, in addition to highlights from our survey, covers the following topics at length:
- Project delivery and management
- Digital solutions
- Impact of evolving business models
- Topside technology selection