More FPSOs have been ordered this year than at any time since the oil price crash of 2014, with plenty more orders anticipated, according to a new floating production systems report from Singapore’s Energy Maritime Associates (EMA).
Eight FPSOs have been awarded so far in 2018, including six newbuild units and two redeployments of idle units. Five of the newbuild orders were placed in China and one in Singapore.
EMA has identified 31 projects most likely to be sanctioned in the next 12 months. This includes 17 FPSOs, five FSRUs, four FSOs, two production semis, two MOPUs, and one FLNG. A few of these will be awarded by year-end, with most being approved in 2019.
EMA’s managing director, David Boggs, commented: “Oil prices have rebounded over 100% from their lowest levels, while offshore costs have hardly moved. As a result, many offshore developments are now very competitive, if not more attractive, than onshore shale fields, with breakevens as low as $30 per barrel. We see this as the start of a new cycle for the industry, with re-set pricing and a growing oil price, similar to the period from 2004/5. If oil prices remain stable, there is tremendous opportunity for new floating production projects over at least the next two years. While there have been substantial industry reductions and consolidation, there is still sufficient industry capacity, particularly in the subsea and drilling sectors through 2020.”
