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Floating Production Market Set For Growth

In its latest quarterly Floating Production Systems Report, Energy Maritime Associates (EMA) has reviewed the market for floating production systems.

In the first half of 2021 there have been six FPSO awards, which is double the number of all of 2020.

EMA expects the pace of awards to increase over the next year and has identified 35 projects (19 FPSOs, five FSOs, five production semis, four FSRUs, one FLNG, and one MOPU) that are most likely to be sanctioned in the next 12 months. This assumes continued management of the global pandemic and oil prices remaining above $60/bbl.

Graph showing historical FPS awards vs. average WTI price by year. Increasing oil prices are a bright indicator for future project awards.

EMA Managing Director David Boggs said: “After a slow 2020 due to the COVID-19 pandemic and falling oil prices, the floating production market has rebounded and is clearly in the midst of a growth cycle. We expect to see a return to over 20 orders annually for the next few years, including 12-15 FPSOs, like the period from 2010-2014 following the global financial crisis.

“The industry has shown its resilience and ability to execute projects despite COVID restrictions, albeit with some delays. While there are longer-term questions about the future of hydrocarbon investments, we do not see any significant impact on sanctions for most projects in the near term.

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“Given the robust oil price, expectations for global growth, attractive returns for offshore developments, and pipeline projects to be sanctioned, the outlook for the floating production sector over the next 12-24 months is very bright.”

Source: offshore

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