FPSO Market – Snapshot
A skimming generation stockpiling and offloading (FPSO) vessel is a sort of coasting creation framework utilized for seaward generation, stockpiling, and offloading of oil and gas. By and large, a FPSO vessel is a changed over oil tanker or a recently built unit. A FPSO is regularly comparable in appearance to a ship and is furnished with generation and preparing offices locally available. Moreover, FPSOs comprise of offloading offices to ship prepared oil and gas to coastal getting offices through a bus tanker.
The FPSO market is required to extend at a quick pace during the estimate time frame because of ascend in interest in seaward oil and gas investigation, particularly in profound water (500 to 1,499 meters) and ultra-deepwater (1,500 meters or more) zones. The consumption of existing oil and gas fields is prompting an ascent in concerns with respect to the investigation of new oil and gas fields in an offer to meet vitality prerequisites soon. Because of this, oil and gas investigation organizations have pushed the investigation of oil and gas from coastal to seaward zones, which, thus, is driving extension of the FPSO advertise.
Besides, enormous speculations and specialized difficulties associated with the establishment of fixed generation stages in remote areas is boosting the FPSO advertise. Moreover, the capacity of FPSOs to support brutal workplaces is driving interest for them from the oil and gas industry over the globe.
Increasing Investment in Offshore Oil and Gas Exploration Drives the Market
Demand for floating production storage and offloading (FPSO) units is expected to surge with increased investment in offshore exploration of oil and gas, especially in deepwater and ultra-deepwater areas. Depletion of existing onshore oil and gas fields is pushing exploration activities to offshore deepwater areas. Currently, the exploration of oil and gas is concentrated in offshore fields, primarily in areas such as the North Sea, Brazil, and West Africa.
Increase in demand for oil and gas due to rise in consumption of fuel is driving development and increasing investment in new oil and gas fields globally. Furthermore, demand for FPSOs is expected to rise during the forecast period due to expansion in the upstream oil and gas industry, supported by government incentives to boost offshore oil and gas exploration.
FPSO vessels are capable of receiving or extracting raw hydrocarbons from the sea bed and processing them onboard. Additionally, FPSOs are equipped with temporary onboard oil and gas storage facilities. Processed oil and gas from FPSOs is transferred or offloaded through an oil tanker or pipeline to the receiving terminals or distribution facilities.
High Capital Investment is a Key Restraint of the Market
The FPSO industry is capital intensive in nature. Construction and building of a new FPSO unit requires high initial investment and substantially large financing. Building a new FPSO costs approximately US$ 2.5 Bn to US$ 3 Bn. However, the cost of conversion of an oil tanker is approximately between US$ 1.5 Bn and US$ 2.0 Bn.
Additionally, the cost of operation, testing, and deployment add up to the total investment in an FPSO vessel. Furthermore, factors such as rising cost of materials and labor due to inflation is further affecting the return of investments (ROI) of FPSO operators. All these factors are likely to restrain the FPSO market during the forecast period.
Tie-ups with Various Players in the Offshore Industry for Accelerating Development of FPSOs
An FPSO building project involves extensive engineering, procurement, construction, and commissioning. Key players in the FPSO industry strategically partner with vendors, yards, and key technology providers for delivering large projects of floating production systems, including FPSOs. Increase in focus on collaboration and strategic partnerships among various players is creating opportunities for advanced service providers of FPSOs and faster deployment of new FPSOs.
Latin America Held a Major Share of around 30% in the Global FPSO Market in 2017
Based on region, the global FPSO market can be divided into North America, Latin America, Europe, Asia Pacific, and Middle East & Africa. Latin America dominated the global FPSO market in 2017. This is primarily due to the presence of a large number of FPSOs in the region. Major offshore fields located on the Brazilian coast include Santos, Campos, and Espirito Santo basins among others.
Expansion in the FPSO market in Brazil is attributed to the increasing investment in exploration of deep water areas in the region. Thus, Latin America accounts for a major share of the global market. Latin America is key player in the FPSO market, followed by Middle East & Africa, Asia Pacific, North America, and Europe.
Global FPSO Market dominated by Several Players
Key players operating in the global FPSO market are MODEC, Inc., SBM Offshore N.V., BW Offshore, Bluewater Energy Services B.V., Bumi Armada Berhad, Yinson Holdings Berhad, and Teekay Corporation.