Rystad Energy's Oilfield Service Newsletter: FPSO Market Alive and Making Strides Again

Posted by OilVoice Press - OilVoice


The global floating production market has stirred back to life after enduring a couple years in virtual hibernation during the downturn. Last year brought some relief to the market, with six new FPSO orders worldwide, and with oil prices recovering to around $80 per barrel this year, combined with technological advancements and reduced costs, momentum has picked up further.

More than 30 FPSO projects could reach FID between 2019 and 2021. The cost-cutting efforts of the downturn are a major contributor to the projects favorable economics. Fourteen projects have a breakeven below $50 per barrel, 15 projects come in between $50 and $70 per barrel. Just three of the expected projects have breakevens above $70 per barrel. The pipeline of projects indicate that FPSO awards are set for a strong comeback driven by Brazil.

Despite a stocked pipeline of low-cost projects, FPSO providers are still focusing on innovation and standardization. SBM Offshores Fast4ward concept and BW Offshores Rapidframework program are two interesting examples of the above. Both concepts are designed to reduce complexity and construction time in a typical FPSO schedule. If standardization and innovation could structural reduce time to first oil for floating production solutions, it would further improve economics as fast tracking a project is an effective way to improve project economics.

In the period from 2019 towards 2021, we expect 25 projects to be committed either under a build-operate-transfer model (BOT) or under a lease-and-operate model. For the BOT model, Petrobras is preparing to place five awards under this model, targeting the ageing Marlim fields and the Mero, Buzios and Parque das Baleias developments.

Historically, Petrobras's go-to supplier for FPSOs with processing capacity over 100,000 barrels per day has been either SBM Offshore or MODEC. Hence, for the upcoming FPSO projects in Brazil, SBM Offshore and MODEC are likely to compete for the bigger projects while suppliers such as BW Offshore and Teekay are likely candidates for the smaller projects.

The BOT model is also being applied by ExxonMobil in Guyana on its high-profile Liza Phase 2 FPSO project. Given government approval, SBM Offshore will conduct fabrication, installation, lease and operation of the Liza 2 FPSO for up to two years, after which ExxonMobil will assume ownership. For the Payara field, news has yet break if ExxonMobil will continue to develop its relationship with SBM Offshore with its third FPSO in Guyana. For the opportunities emerging in Asia-Pacific, MISC, Bumi Armada and Yinson are all players with historical strong presence in the region, and likely in good position to compete for contracts.

New service from OilVoice
Trip Shepherd is for companies who need to track their staff in areas of risk.
It's free to use, so we invite you to try it.

Rystad EnergyOilfield ServicesFPSOFPSOsFloating ProductionProductionoil price

More items from oilvoice

Cyber Security Experts Unite to Protect Europe’s Critical Industries

CS4CA Summit Returns to London this October Staying abreast of fast-paced industry developments is crucial for cyber security professionals. And while one can learn a lot from publications and social media, it's hard to beat the value of insights gained first-hand from peers. This is why 150+ IT ...

OilVoice Press - OilVoice

Posted 1 year agoPress > cybereurope

Africa E&P Summit

The organisers of the Africa E&P Summit are bringing together Africa's leading exploration companies and governments, just one of the many reasons why you should be attending frontier's event that they are organising and hosting in London at the IET: Savoy Place, 22-23 May. Over 200 key senior exec ...

OilVoice Press - OilVoice

Posted 1 year agoPress > Africasummitoil summit +2

Equinor Deepens in Offshore Wind in Poland

Equinor has exercised an option to acquire a 50 % interest in the offshore wind development project Bałtyk I in Poland from Polenergia. This transaction is a follow-up of the agreement between the two companies which came into force in May 2018 , by which Equinor acquired a 50 % inter ...

OilVoice Press - OilVoice

Posted 1 year agoPress > EquinorEquinor EnergyPoland +2

Nigeria has highest capex on crude and natural gas projects in sub-Saharan Africa Over Next Seven Years, says GlobalData

Nigeria accounts for more than 34% of the proposed capital expenditure (capex) on planned and announced crude and natural gas projects in the sub-Saharan Africa over the period 2018–2025, according to GlobalData , a leading data and analytics company. The company's report: ‘H2 2018 Production ...

OilVoice Press - OilVoice

Posted 1 year agoOpinion > GlobalDataNigeriaCrude +5

CNOOC Signs Strategic Cooperation Agreements with 9 International Oil Companies

HONG KONG, Dec. 18, 2018 /PRNewswire/ -- CNOOC Limited (the "Company", SEHK: 00883, NYSE: CEO, TSX: CNU) announced today that its parent company, China National Offshore Oil Corporation (CNOOC), has signed Strategic Cooperation Agreements with 9 international oil companies including: Chevron, Conoco ...

OilVoice Press - OilVoice

Posted 1 year agoPress > CNOOCChina National Offshore Oil CorporationChevron +11
All posts from oilvoice