Douglas-Westwood's new World Floating Production Market Forecast 2015-2019 forecasts that despite the current low oil price environment, between 2015 and 2019 $81 billion (bn) will be spent on FPS units - an increase of 73% compared to 2010-2014. The value of annual installations is projected to grow from nearly $12bn in 2015 to $21bn in 2017 before declining to $17bn in 2019. Projects already ordered will account for much of this spend.
Despite Capex growth, the outlook this year for orders is poor. The low oil price is expected to impact the market, leading to a number of delayed project sanctions. This can be seen in the declining number of orders for 2015 and subsequent installation decline in 2018. Projects already under construction are unlikely to be affected.
FPSOs represent by far the largest segment of the market both in numbers (87 installations) and forecast Capex (81%) during 2015-2019. TLPs account for the second largest segment of Capex (9%) with FPSSs third (7%).
Latin America will see nearly a third of the 110 installations forecast and 32% of the projected Capex. Asia accounts for nearly a quarter of forecast installations, but only 13% of spend. Africa is important in value terms, with 22% of the projected Capex. Western Europe is expected to form 15% of forecast spend. Deepwater expenditure will make up 68% of the global FPS market.
Financing remains a challenge for leasing contractors and smaller E&P companies as a result of the lower oil prices. Low oil prices have placed additional strain on company budgets and greater efforts are being made to ensure delays and cost over-runs are avoided. Local content requirements are also pushing up prices and extending lead times, particularly in Brazil.
The World Floating Production Market Forecast 2015-2019 report is now in its 13th Edition and is supported by analysis, insight and industry consultation and includes:
DW's market forecasting is trusted by sector players worldwide, with clients including the world's top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms.
The report is essential for financial institutions, equipment manufacturers, offshore engineering, construction, operations & maintenance companies and contractors, oil & gas companies, lease contractors, shipbuilders and agencies & government departments wanting to make more informed investment decisions.
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