Growth in North American Activity as Health Returns to FPS Sector
The Q2 edition of Westwood Energy’s World Floating Production Systems Tracker, has been released. Compared to the Q1 edition of the report there have been upward revisions to the number of orders and units installed 2018-2022 as the strong growth in activity first seen at the start of 2017 continues. In total we expect 64 units to be installed between 2018 and 2022 with a total value of $64bn. Orders worth $61bn are also expected over the same period.
Phased FPS Capex 2013-2022
Nowhere is the resurgence of the FPS sector clearer than in the USA, where previously a number of high profile project cancellations were seen due to rising costs and disappointing appraisal drilling. Now however, an additional three units have been added to the order forecast compared to the Q1 edition as operators re-engineer development solutions for a lower oil price. A key driver has been a willingness to embrace a standardised approach to commissioning new units, with all three new units added to the forecast utilising existing designs to reduce cost and time.
New projects in the country added to our analysis include LLOG’s Kings Landing FPSS which will exploit the Khaleesi and Mormont fields. The project is currently planned with an FPSS that will be a mirror of LLOG’s own Delta House unit. Similarly, Shell will reportedly reuse the design for the Vito FPSS on their Whale field, which is being fast tracked after discovery in 2017. We note also that SBM are progressing the Fast4Ward project which aims to provide a standardised FPSO design to the market.
- 68 Orders expected over the 2018-2022 period, 17 of which are expected to come in 2018
- Phased development Capex of $58bn forecast for the next five years
- Backlogs are reaching cyclical lows, however consistent levels of orders will boost expenditure and activity into the 2020’s.
- With spend of $24bn, it is Latin America that accounts for the largest proportion (41%) of phased Capex. This is driven by Petrobras and activity at the Liza field offshore Guyana.
FPS Market Coverage:
- Installation Capex forecast by region and type.
- Unit installation forecast by region and type.
- Order Capex forecast.
- Analysis of FPSO leasing market.
- Summary of new and expected 2018 orders and units onstream.
- Comparison between reports – highlighting major news stories of the quarter.
Analysis is based on Westwood’s Sectors FPS database, which details more than 700 FPS projects that are updated and tracked daily. The World Floating Production Systems Tracker is essential for anyone evaluating investment opportunities in the FPS sector, including growing firms seeking competitive advantage across segments, investment banks and advisory firms wanting to improve their understanding of the business, and industry analysts seeking a competitive edge.
If you are evaluating current or future investment opportunities in the FPS sector and need to understand the future spend outlook or a unit-by-unit specification assessment, please contact a member of the OFS Research team on:
Direct: 44 (0)1795 591600