Westwood: record number of FPSO licenses set to expire in 2022
Published by Nicholas Woodroof,
Editor
Oilfield Technology,
Westwood’s Global Floating Production Systems (FPS) report notes under a scenario where no contract extensions are taken on current leased FPSOs, 14 additional units would become available in 2022. Alternatively, if all available extension options were taken, nine units would come off-contract adding to the 16 units currently awaiting upgrade or redeployment. Of those coming off contract in 2022, 36% are 40+ years old and are potential candidates for scraping.
Mark Adeosun, Senior Analyst at Westwood said: “This outlook uncovers a risk for FPS lease contractors such as BW Offshore and Modec who have recently enjoyed resurgent EPC activity but are now facing potentially significant backlog and revenue issues in the operations and maintenance part of their businesses.”
However, the analysis also highlights upside potential for E&Ps sitting on marginal reserves. These operators could take advantage of the current rebound in oil prices and FPSO availability to accelerate project sanctioning and in turn enjoy more cost-effective field development.
Adeosun continued: “There has been significant growth in FPS orders since 2016 and that improved market sentiment has translated into operators revisiting projects previously stalled by the 2020 oil price crash. We expect to see up to 17 FPS awards, valued at ~US$18bn over 2021, up 72% on our Q4 2020 outlook. This underlines the importance of near real-time data and analysis when market dynamics are moving rapidly to ensure you stay ahead of the competition.”
The report was compiled from Westwood’s PlatformLogix solution, which covers global fixed and floating production facilities with data on 13 000+ units.
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Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/19052021/westwood-record-number-of-fpso-licenses-set-to-expire-in-2022/
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