Offshore staff
ABERDEEN, UK – Westwood Global Energy Group expects the floating production system (FPS) market to recover to $13 billion annually from 2021-24, assuming an average oil price of $60/bbl from 2022.
This year, Westwood expects EPC awards for FPS projects to slump by 59% to just over $5 billion (against close to $13 billion), based on an average oil price of $37/bbl.
This is 73% down on the consultant’s pre-COVID-19 outlook.
During 1Q, the Sangomar FPSO and FPSO Anna Nery awards accounted for around $2 billion of FPS EPC value and 170,000 b/d of extra liquids production capacity.
Other key contracts that could still be awarded in 2020 include Equinor’s Bacalhau and Petrobras’ Mero 3 offshore Brazil, accounting for more than $3 billion in EPC spend and 400,000 b/d of additional liquid production capacity.
Mark Adeosun, senior analyst, Offshore at Westwood, said: “While the impact of the pandemic has hit FPS EPC contract awards significantly this year, the industry is in a much better place than the downturn of 2016 based on order intake so far, as well as the healthy backlogs of FPS contractors stemming from 2017-2019 activity.”
Over the 2020-24 period, the consultant estimates probable FPS EPC contract awards totalling $56 billion – including 40 FPSOs, nine FPSs, and seven FLNG systems.
Adeosun added: “Over the next five years, Latin America will account for nearly 42% of probable FPS awards – totaling an estimated $24 billion. Brazil is expected to dominate investment, as international oil companies ramp up activity and Petrobras commits to the development of its presalt discoveries.
“Outside Brazil, Guyana will contribute two additional orders to the forecast in addition to the Liza Unity and the Prosperity FPSO that are currently being built in Singapore (topsides) and China (hull).”
07/16/2020
