Global Floating Production Storage and Offloading (FPSO) Market - 2023-2030

Market Overview

The Global Floating Production Storage and Offloading (FPSO) Market reached US$ 14.2 billion in 2022 and is expected to reach US$ 23.5 billion by 2030, growing with a CAGR of 6.5% during the forecast period 2023-2030.

The current geopolitical situation has been highly conducive to the growth of the global FPSO market. With supplies from traditional exporters in the Middle East being bought up by Asian countries, European countries are relying upon newly emerging exporters in South America and Africa to fill gaps in its energy imports. Expanding offshore oil and gas production in Africa will create new demand for FPSOs in the medium and long-term.

Marine engineering companies are developing new designs to improve the energy efficiency and overall performance of FPSOs. For instance, in May 2023, MISC, a Malaysian marine engineering company unveiled a new FPSO design that utilizes mega-module topsides , improving systems integration and allowing for sustainable technologies.

Market Dynamics

Growing Global LNG Demand

LNG is considered a cleaner-burning fuel than coal and oil, resulting in lower greenhouse gas emissions. Natural gas, including LNG, is often considered a transitional fuel towards a low-carbon future. Furthermore, with the disruption in Russian natural gas supplies due to the Russia-Ukraine war, European countries are increasingly turning to liquified natural gas (LNG) to fulfill their energy demand.

The rising demand for LNG has led to increased exploration and development of offshore gas fields. Many of these fields are located in remote and challenging offshore environments where traditional fixed platforms are not feasible. FPSOs offer a flexible and cost-effective solution for LNG production, storage, and offloading in these offshore gas fields.

FPSOs can incorporate advanced technologies for gas processing and liquefaction on board. The technologies enable the conversion of natural gas into LNG, making it easier and more cost-effective to transport and store. The integration of gas processing and liquefaction capabilities on FPSOs streamlines the overall production process and supports the growth of the global LNG market.

Decommissioning of Offshore Platforms

Decommissioning becomes necessary as offshore platforms reach the end of their production life. Instead of altogether abandoning the field, FPSOs can be deployed to extract remaining reserves and extend the field's productive life. FPSOs enable continued production, storage, and offloading of hydrocarbons, maximizing the value of offshore assets and reducing the need for full platform removal.

FPSOs offer a cost-effective alternative to decommissioning fixed offshore platforms. Removing offshore platforms can be expensive and complex, involving heavy lifting and dismantling operations. By deploying an FPSO to the field, operators can avoid the costly platform removal and disposal process. Instead, they can continue production while using the existing infrastructure and facilities.

High Capital Costs

Developing and deploying an FPSO involves substantial upfront capital investment. The costs associated with engineering, construction, installation, and commissioning of FPSOs can be considerable. New FPSOs in the post-pandemic period have become especially expensive. For instance, in June 2021, Petrobras, Brazil's state-owned energy company, ordered a new FPSO P-79 from South Korea's DSME shipbuilding company for US$ 2.3 billion.

The significant capital outlay for FPSO projects affects the return on investment and profitability. The long payback period required to recoup the initial investment, coupled with uncertainties in global oil prices and project performance, can make it a less attractive proposition for financers. It can lead to a cautious approach from operators and impact the growth of the global FPSO market.

COVID-19 Impact Analysis

The pandemic caused disruptions across the global economy, including the oil and gas industry. As a result, many operators postponed their investment decisions and delayed or canceled planned FPSO projects. Uncertainty regarding the duration and severity of the pandemic, coupled with volatile oil prices, led to reduced capital expenditure in the industry.

The pandemic resulted in disruptions to global supply chains. Restrictions on international travel, lockdown measures, and temporary shutdowns of manufacturing facilities affected the availability and delivery of critical components and equipment necessary for FPSO projects. Despite the short-term challenges caused by the pandemic, the long-term outlook for the FPSO market remains positive.

Ukraine-Russia War Impact

The Russia-Ukraine conflict led to European Union (EU) and the U.S. imposing stringent economic sanctions on Russia. The sanctions caused the complete blockage of Western technology transfer to Russia. The sanctions deprived Russia of access to advanced FPSOs for the exploration of offshore oil and gas reserves in the Arctic.

A radical reorientation of energy supplies from Russia to the U.S. and the Middle East occurred in Europe. Many countries in the region started buying large cargoes of liquified natural gas (LNG) on the international markets to fill the gap left by the disruption of Russian energy supplies. It created a temporary demand for FPSOs to ensure secure LNG storage while long-term storage facilities were built onshore.

Segment Analysis

The Global FPSO Market is segmented based on type, carrier type, water depth, hull type and region.

Double-Hulled Ships are the Most Widely Used for FPSO

The primary advantage of double-hulled ships is their improved safety and environmental protection features. The double hull design provides an extra layer of protection, reducing the risk of oil spills in the event of a collision or grounding. The outer hull acts as a protective barrier, minimizing the chances of oil leakage and offering increased resistance to damage.

Double-hulled tankers meet or exceed stringent regulatory requirements set by international maritime organizations and environmental agencies. Regulations such as the International Maritime Organization's (IMO) MARPOL Convention mandate the phase-out of single-hulled tankers and the use of double-hulled vessels to prevent oil pollution. By using double-hulled ships, FPSOs can comply with these regulations and ensure higher environmental protection.

FPSOs are long-term investments, with operational lifetimes spanning 15-20 years. Double-hulled ships are generally more durable and have longer service lives than single-hulled vessels. The added protection provided by the double hull design helps extend the life of the FPSO, reducing the risks of structural fatigue, corrosion and potential failures associated with aging single-hulled tankers.

Geographical Analysis

Commercial Production from New Reserves Will Propel Demand from South America

New commercial offshore reserves have been discovered in South America, mainly off the coast of Guyana and Brazil. The discovery of retail oil and gas deposits has increased demand for FPSOs as companies scramble to exploit these reserves. Traditional South American producers such as Venezuela are increasing their capacity. For instance, in January 2023, a Trinidad and Tobago company was awarded a license to develop a new offshore gas field in Venezuela.

In May 2023, SBM Offshore, a Dutch oilfield services company, signed a long-term maintenance contract with the multinational energy company Exxon Mobil Corporation for the company's FPSO fleet servicing the Starboek offshore block near Guyana. In December 2022, Petrobras, the Brazilian state-owned oil and gas company, announced that it had begun the tendering process to obtain two new FPSOs for operation in the Atapu and Sepia deepwater oil fields.

Competitive Landscape

The major global players include: BP Plc, Aker Solutions AS, Shell Global, Bluewater Energy Services B.V., Bumi Armada Berhad, BW Offshore, Chevron, ExxonMobil Corporation, MODEC, Inc. and Petrobras.

Why Purchase the Report?

• To visualize the Global FPSO Market segmentation based on type, carrier type, water depth, hull type and region, and understand critical commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous diamond art painting market-level data points with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The Global FPSO Market Report Would Provide Approximately 64 Tables, 66 Figures And 215 Pages.

Target Audience 2023

• Oil and Gas Companies
• Energy Trading Companies
• Marine Engineering Companies
• Industry Investors/Investment Bankers
• Research Professionals