A Solid year for FPS
The World Floating Production Systems Tracker Q4 2017 is now available and is a concise 20-page update document presenting Westwood’s latest view on the market. Capex for both installations and orders has increased by 12% and 22% respectively, compared to the Q1 edition of the report, with orders reaching $45bn and installation expenditure totalling $57bn over 2017-2021. This increase is driven by increased confidence in the sector and materially lower field development costs.
Phased FPS expenditure 2017-2021
- A total of 10 units have come onstream in 2017 YTD, including high-capex units that were ordered prior to the downturn, such as the P-66 and Armada Olombendo
- A total of 11 FPS units have been ordered YTD, including the Liza and Sépia FPSOs and the Mad Dog Phase 2 FPSS.
- Latin America will remain dominant in the sector, accounting for 32% of Capex and 36% of installations. The majority of expenditure will be for Petrobras’ fields in water depths >1,000m which were ordered in 2010 and are yet to be installed.
- Installation expenditure will be diverse, with Africa, Asia, North America, and Western Europe all forecast to have installation expenditure of over $5bn.
- Westwood expects 2017 and 2018 to dominate installation expenditure (accounting for 69% of forecast expenditure over 2017-2021), driven by units ordered before the downturn.
- Installation Capex forecast by region and type
- Unit Installation forecast by region and type
- Order Capex Forecast
- Oil Price Sensitivity Analysis
- Comparison between reports – highlighting major news stories of the quarter
- Summary of new and expected 2017 orders and units onstream
The FPS market has seen a return in 2017, following2016 in which no units were ordered. With two months of the year remaining, 11 units have been ordered, including Petrobras’ first order in two years for the Sépia field. Other notable FPS units, such as the initial FPSO for the Liza field and the Big Dog FPSS, have also been ordered, highlighting the fact that a range of developments are proceeding. Numerous projects have also moved towards FID as operators seek to capitalise on lower supplier prices and replace reserves.
Analysis is based on Westwood’s Sectors database, which details more than 700 FPS projects that are updated and tracked daily. The World Floating Production Systems Tracker Q4 2017 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.
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