Floating production, storage, and offloading (FPSO) sector almost brushed off the pandemic’s effect in 2021 and is likely to continue apace in 2022, with ten new awards expected, a new report from energy intelligence firm Rystad suggests.
Two lease contracts were awarded in the fourth quarter of 2021, bringing the total for the year to 10 – up from just three in 2020.
Demand for FPSO units in Brazil was a significant contributing factor that drove 2021 growth, with seven of last year’s 10 contract awards being Brazilian projects. According to Rystad, this is expected to continue in 2022, with an additional three FPSOs.
In 2022, fellow South American player Guyana should also contribute one FPSO to the global total, with the UK adding two projects. Angola, Australia, China, and Malaysia are forecast to each award one new FPSO contract this year.
“With around 30 FPSO units under construction or queued up for construction, and another 10 expected to be awarded over the next 12 months, the market is set to build on its recent success. However, as witnessed in many other facets of the global economy in recent months, supply chain concerns linger and will test the market’s ability to take in new contracts without uncontrollable cost overruns and delays,” said Zhenying Wu, a senior analyst with Rystad Energy.