Floater market to grow to $42.5 billion by 2005, say analysts

Demand for floating production, storage, and offloading vessels off Africa could drive a new-build floater market forecast to grow to more than $42.5 billion in the next 5 years, said a report from Douglas-Westwood Ltd. and Infield Systems UK Ltd. A total 123 newbuild floating productions systems of various types could be brought on stream between now and 2005.


LONDON, Apr. 27 -- Demand for floating production, storage, and offloading vessels off Africa could drive a newbuild floater market forecast to grow to more than $42.5 billion in the next 5 years, said a report from UK-based analysts Douglas-Westwood Ltd. and data specialists Infield Systems UK Ltd.

A total 123 newbuild floating productions systems of various types could be brought on stream between now and 2005 as the market for floaters rises from an estimated $5.9 billion this year to $10.9 billion.

FPSOs are foreseen to account for 80% of future spending in the floater market, with demand off Africa growing to a total value of $11.6 billion over the next 5 years, followed by Brazil, where the market should grow to $7.9 billion.

Roger Knight, data manager with Infield Systems, said, "Over (the next 5 years,) a total of 153 field prospects are under consideration for development using an FPS by 48 oil and gas companies. Just five companies total 86 -- or 52% -- of the prospects."

Knight said Petroleo Brasileiro SA (Petrobras) was sizing up 19 fields for an FPS; BP PLC 18; Chevron Corp.-Texaco Inc. 16; TotalFinaElf SA 12; the Royal/Dutch Shell Group 11; and ExxonMobil Corp. 10.

As a region, Africa should account for both the largest number of new floaters and the greatest market value, said Knight. The report notes that although offshore North America -- which includes the US Gulf of Mexico -- has 25 floaters in prospect for its developments, all are semisubmersibles, spars and tension leg platforms. FPSOs in the gulf have yet to gain approval.

Offshore northern Europe is forecast to see a decline in the floater market over the next 5 years, sliding from $1.79 billion this year to $1.2 billion in 2002, with total spending on floaters over the next 5 years of $6.77 billion.

Douglas-Westwood Director John Westwood said, "In theory, over the next 5 years, some 55 FPSs could become available for re-use due to field depletion, and these have a potential to reduce the demand from our forecast of 123 units to 68.

"This scenario is unlikely," he noted, "as field depletion dates could be extended due to robust oil prices and conservative initial estimates of field life. In addition, some of the earlier units may not be suitable for redeployment."

Westwood said that despite the pall cast over the floater market by the sinking of Petrobras's P-36 semisubmersible on Roncador, "the alternative of fixed platforms has also been the subject of tragic events, and we would be very surprised if the eventual outcome of the inquiries casts doubt over the concept of floating production."

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