Offshore staff
HOUSTON – After almost two years without an order, 13 FPSOs have been awarded since 4Q 2016, according to Energy Maritime Associates’ 2Q 2018 Floating Production Systems Report.
So far in 2018, three FPSOs have been awarded with another 10 possible orders by year end, bringing the annual total back to levels not seen since 2014.
The report noted that Korea’s loss is Sembcorp’s gain. After encountering significant issues with legacy production projects, the big three Korean yards have only been awarded one non-LNG project since 2016. Daewoo and Hyundai seem focused on standardized units, like FSRUs, while Samsung has been awarded Eni’s Coral South FLNG and BP’s Mad Dog Phase 2 semisubmersible.
According to EMA, Sembcorp has capitalized on this opportunity and been awarded three contracts: a production semi forShell’s Vito field in the Gulf of Mexico, an FPSO hull for Statoil’s Johan Castberg field in Norway, and an FPSO for Energean’s Karish development in Israel. These new units will be built in Sembcorp’s mega-yard facility in Singapore.
In addition, the report indicated that majors are going to China for the first time. Shell’s Penguins FPSO will be built in China. It is also likely that as BP’s Tortue FPSO and the future FPSOs for ExxonMobil’s Liza field will be built in China.
David Boggs, EMA’s managing director, said: “The gradual recovery that began in 2017 has firmly taken hold with FPSO orders expected to reach pre-oil crash levels. In line with our 2018-2022 forecast, there should be at least 10 FPSO awards this year. Oil companies realize that costs in the supply chain are unlikely to reduce further and now is the time to act. After substantial reductions in capacity, industry consolidation, and certain sectors working for below variable cost, it is only a matter of time before margins begin to rise.
“Drilling rates for harsh environment rigs in the North Sea have moved upwards, but this is not yet the case for jackups and drillships in the rest of the world. Moreover, input costs for commodities, such as steel, are also increasing. However, there is still a long way to go before these increasing costs begin to threaten the economics of many deepwater projects…”
Energy Maritime Associates is exhibiting at booth #4471.
04/30/2018
