FPSO predictions 2019

2019-2020 is set to become the biggest period of growth in the history of the FPSO market. At a recent event, the News Stream team spoke with dozens of leading experts and have distilled the key takeaways into five top predictions.

The full transcript of this week's episode of News Stream is available below.

Hello, and welcome to Oil & Gas IQ News Stream. I’m Patrick Gallagher. This week on News Stream, we give a brief overview of our predictions for the FPSO market following the recent FPSO summit, here in London. Over 150 oil and gas professionals working in fields related to floating production, storage, and offloading vessels gathered for three days of workshops, talks, and networking opportunities – and these are our five key takeaways.

Number one: despite problems between many powerful nations, such as the US and China, oil demands will continue to grow

As sanctions affect China, Venezuela, and Iran – the US shows no sign of loosening its current grip on global oil.

According to Rystad, 70-dollar barrels are the new 100 – and with the average production time of FPSOs now 10 months lower than four years ago, the time is ripe for new FPSOs on the order book.

Number two: drilling activity may affect the lease market

With drilling activity spending recently declining, but a growth of offshore investment sent to grow by 4 per cent – the offshore leasing market may grow to fill the gap, soaking up drilling construction budgets that have been left adrift.

Number three: the next three years will see the greatest number of FPSO sanctions in any one period

Between 2019 and the end of 2022, 33 FPSO vessels are due to be sanctioned. Since the oil crash of 2014, demand for FPSOs has become a truly worldwide phenomenon. The Americas are responsible for the largest number of sanctions, with 15, followed by Asia with six, Europe and Africa each with five, and two more in Australasia.

Number four: there will be a spike in large-scale projects in 2019

In 2018, 88 projects were sanctioned, and the same number are scheduled for 2020. However, over the next ten months, there are 122 – 17 floating solutions, and 105 offshore field projects.

Number five: the flood of FPSOs may cause bidding issues

A new sort of development strategy may be needed, as firms struggle to find bidders. With order books potentially filling up before Q3, greater global FPSO production capabilities will need to develop in order to accommodate the sheer volume of work to be done. Standardisation across all companies would help to reduce capex costs, and could improve the industry’s efficiency.

That’s all from News Stream this week. For more on FPSOs, stay tuned for our official whitepaper – and if you want more from us here at Oil & Gas IQ, why not become a member, or register for our free online event – OPEX in oil and gas, coming on March the 19^th.