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 News Release
  July 15, 2006

 

Deepwater E&D Driving Orders for
Floating Production Systems to Record Level

 

IMA has just released its latest study of the outlook for floating production systems.  This is the 28th study in a series begun in 1996 that tracks this dynamic and growing market sector.   

Floater Orders At Record Level — Orders for 29 floating production systems have been placed over the past 12 months, pushing the order backlog to a record level.  As of mid-July, 47 floating production units were on order — 36 FPSOs, 2 TLPs, 6 production semis, 2 production spars and a production barge.  In addition, 6 floating storage units and 3 jack-up production units were being built or converted.

 

Order Backlog for Floating Production Systems
Continues to Grow
(excludes storage-only units and MOPUs)

Orders To Add 25% to Supply — Delivery of units now on order will increase the number of floating production units by 25 percent.  In terms of processing capacity, the units now on order will add 4.3 mb/d oil processing capacity, an increase of 30 percent over oil processing capacity of 14 mb/d now on the water.   Installed oil processing capacity on leased FPSOs will show the biggest increase (48 percent) as units on order come into service. 

Speculators Active in the Market — The recent ordering pace has been lifted by a spurt of speculative orders for FPSOs.  Anticipating future requirements, operators have placed orders for 7 FPSOs that are without field contract.  In addition, the major FPSO operators have been acquiring conversion hulls to have available for new contracts.  While there has been speculative building of FPSOs in the past, there has been nothing like what we have seen recently.

China Increasing Player in Market — Floating production and storage systems are currently being fabricated or converted at 31 facilities worldwide.  This reflects locations where major fabrication or integration contracts are being performed.  Asia continues to be the focus of building activity for production and storage floaters.  Korea has established a particularly strong presence in fabrication of top end, purpose-built production units such as Agbami and Akpo.  Singapore remains the major center for conversion of tankers to FPSOs.  But the rising star is China, which is establishing a growing presence in building midsize production units, both ship shape and cylindrical.  Five yards in China are now involved in FPSO hull fabrication.

Lots of projects near contract stage — In our July study we indentify 109 projects in the planning stage that potentially require a floating production or storage system.  Over the past several months there has been a significant increase in the number of projects in the late stage of planning.  Of the 109 projects, 45 projects are in bidding or final design.  In March we had identified 37 projects in the bidding or final design stage, which was a significant increase from the 23 projects we had identified in this stage as of November 2005.

Long Term Outlook — Earlier in the year we forecast orders for 103 to 130 production floaters over the next five years.  If the current ordering pace were to continue, even the high end of this forecast would prove to be conservative.  But we continue to feel that rig availability will cap field development over the next few years and constrain floater orders to within the forecast range. 


contact Jim McCaul

tel:  001-202-415-8501

email:  imaassoc@msn.com