IMA Report: Floating Production Sector Looks “Very Promising”

(press release)
Thursday, November 18, 2010

The number of floating production systems continues to grow – 250 floating production units are now in service or available worldwide. Five years ago there were 177 units, ten years ago 119 units. In the current inventory are 155 floating production storage offloading vessels (FPSO), 42 production semis, 22 tension leg platforms, 18 production spars, 8 production barges and five floating storage regasification vessels (FSRU).

Current order backlog consists of 49 production floaters. In the backlog are 35 FPSOs, 6 production semis, 1 tension leg platform, 3 FSRUs and 4 floating gas liquefaction vessels (FLNG). Brazil continues to dominate orders for production floaters. Of the 49 production floaters on order, 19 units are being built for use offshore Brazil – about 40 percent of the order backlog. Seven units on order do not have field destinations at this time. They include 4 FLNGs, 1 FPSO in liquidation and 2 FPSOs where work has been slowed.

Available production floaters

Eleven production floaters are off field and looking for work as of mid-November (see exhibit). Not all of these units will likely find new employment. Some are candidates for scrapping. But among the available units are at least a half dozen FPSOs that appear capable of being modified and competitively redeployed. In addition, the three FPSOs and four FLNGs that were speculatively ordered are available for field deployment.

The number of available units will likely grow over the next several years. A significant number of FPSOs are reaching end of field life. Three FPSOs have been on field for more than 20 years, 8 for more than 15 years and 27 for more than ten years. At least half of these units look like redeploy candidates, particularly 15 units that have been operating in the North Sea more than ten years and 2 units that have been operating more than ten years off Australia.

Future very promising

According to Jim McCaul, head of Houston/Washington based offshore industry market analysts, “the fundamentals driving the floating production market look very strong.” McCaul says “IMA is now tracking 196 offshore projects at various stages of design or planning that potentially require a floating production or storage system.”

New safety and permitting regulations imposed as a result of the Macondo spill will slow drilling starts in the short term and add cost to future offshore development. But McCaul said the regulations are unlikely to have major long term impact on project development in the GOM.

“There will be added burden to obtaining permits and higher cost for equipment such as upgraded BOPs. But the burden will be insignificant in the context of the revenue potential of a large producing well.”

According to McCaul, development in the GOM has not stood still over the past six months. “While the drill moratorium was in place, several major deepwater projects in the GOM moved to the development stage. A contract for a production semi on Tubular Bells was awarded and contracts for production floaters on three other projects (Olympus TLP, Jack/St. Malo production semi and Bigfoot TLP) moved to the contract-imminent stage.”

The Macondo spill generated a flurry of proposals to suspend drilling in other deepwater areas. But according to McCaul, “the proposal by the European Commission to impose a moratorium on deepwater drilling offshore Europe was rejected. Canadian authorities decided no drilling ban offshore Canada was necessary. In Brazil, the most important floater region, deepwater is business as usual.”

McCaul says, “at the end of the day, the world needs oil and deepwater is a major source of future production.”

For further information on this study Email: imaassoc@msn.com or visit www.imastudies.com

 

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Odfjell Drilling in Tighter 2Q North Sea Market

Odfjell Drilling reports second quarter 2014 financial results showing a profit of US$29-million. Profit & loss Q2 2014 Operating revenue for Q2 2014 was USD 272 million (USD 289 million),

Brazil AHTS Contract Breakthrough for Havyard

Havyard says it is to deliver the ship design and equipment for four anchor handling tug supply (AHTS) vessels that are to be built and operated by the Brazilian

EOC Takes Full Ownership of OSVs

On 26 August 2014, EOC Limited agreed to acquire 50% of the entire issued share capital of Lewek Antares Shipping Pte. Ltd. (the "Target") , a company incorporated under the laws of Singapore,

 
 
Maritime Contracts Maritime Security Maritime Standards Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1875 sec (5 req/sec)