Floating, Production, Storage, and Offloading (FPSO) Market: Snapshot
Fuel consumption has increased over the years, leading to increased pressure on the production of oil and gas. By deploying floating, production, storage, and offloading (FPSO) units, this deficit can be controlled. The demand is expected to grow with increased investment in newly explored offshore oil and gas fields in deepwater and ultra-deepwater. Also, government incentives to boost offshore oil and gas exploration have added to the growth of FPSOs.
However, the cost of constructing or building a new FPSO vessel and unpredictable oil prices are affecting the cash flow in the FPSO units, restraining the market growth. In addition to this, damaging the aquatic ecosystem with oil spills due to leakage and damage of an FPSO vessel is restricting the growth.
According to TMR, the market is expected to grow at a CAGR of 16.2% between 2015 and 2021. It is also predicted to rise from US$15.9 bn in 2014 to a valuation of US$43.4 bn by 2021.
Low Capital Investment Driving Demand for Converted FPSOs
The FPSO market is categorized on the basis of type into converted, new-build, and redeployed. The converted FPSO segment held majority of the global FPSO market in 2014. Oil tankers known as Very Large Crude Carriers (VLCCs) are usually converted FPSOs. Old and worn out tanker hulls are also reformed into converted FPSO units. With an average capacity of producing 60,000 to 150,000 barrels of oil per day, converted FPSOs are in high demand. Another driver for the growth of this segment is the low capital investment and faster deployment of converted FPSOs as compared to new-build FPSOs.
There is a strong possibility of redeployed FPSOs taking over the market in the coming years.
Though the redeployed FPSOs market is still in its preliminary stage, it is expected to grow significantly due to increased expenditure on the exploration of new offshore oil fields and requirement of faster deployment of FPSOs in new oil fields.
The global FPSO market can be segmented on the basis of water depth into shallow water (up to 499 meters), deepwater (500 meters to 1,499 meters), and ultra-deepwater (1,500 meters and above). Deepwater dominated the market in 2014 and is projected to lead the market in the near future. There has been a rise in the capital expenditure for the exploration of deepwater oil reserves, and this in turn is expected to add to the growth of this segment during the forecast period. There are, however, a few factors limiting the growth of the market. These are rising environmental concerns, legal complexities over proposed fields, and local content requirements leading to a delay in project execution and cost overruns.
Mature Oil and Gas Reserves make North America and Europe Market Leaders
The global FPSO market is led by North America and Europe. It is anticipated that these two market leaders will continue to rule in the years to come due to their established oil and gas reserves. It is also important to note that with rising oil and gas activities, along with considerable government support, Brazil is expected to become a major FPSO market in the Americas region. Countries such as Ghana, Guinea, Nigeria, and Angola in Africa are also deemed to witness a growth in the market due to increased demand for FPSOs. With newly found deep sea and oil gas reserves in the South China Sea, North Sea, and Gulf of Mexico, the market for FPSO will benefit from these areas in the years to come.
SBM Offshore N.V. (Netherlands), Bumi Armada Berhad (Malaysia), MODEC, Inc. (Japan), Teekay Corporation (Bermuda), BW Offshore (Norway), Bluewater Energy Services B.V.(Netherlands), Aker Solutions ASA (Norway), Hyundai Heavy Industries Co., Ltd. (South Korea), Yinson Holdings Berhad (Malaysia), and Samsung Heavy Industries Co., Ltd. are the key players in the FPSO market.
A floating, production, storage and offloading (FPSO) vessel are a type of floating production system used for offshore production, storage and offloading of oil and gas. Generally, a FPSO vessel is a converted oil tanker, or a newly constructed FPSO unit. A FPSO is often similar in appearance to a ship, equipped with production and processing facilities onboard. Furthermore, FPSOs consist of offloading facilities for the purpose of transporting processed oil and gas to onshore receiving facilities through a shuttle tanker.
FPSO market is expected to see a robust growth during the forecast period attributed to the rising investment in offshore oil and gas exploration, especially in deepwater (500 to 1,499 meters) and ultra-deepwater (1,500 meters and above). Depleting present oil and gas fields globally is leading to rising concern for exploration of new oil and gas reserves for the purpose of meeting future energy requirements. Due to this factor, the oil and gas exploration companies have pushed exploration of oil and gas, from onshore to offshore, which in turn is driving the FPSO market growth. Furthermore, requirement of high investment or capital expenditure and technical challenges involved in installation of fixed production platforms or infrastructures in remote locations is driving the FPSO market growth. Additionally, ability of FPSOs to sustain harsh working environment and capability of FPSO to be moored at different locations after depletion of existing operating oil field is further driving the demand for FPSOs from oil and gas producers across the globe.
However, high capital expenditure requirement for construction or building of a new FPSO vessel is restraining the market growth. Moreover, volatile oil prices is affecting the flow of cash in the FPSO industry, limiting the market growth. Additionally, rising environmental concern related to the pollution caused by oil spills due to leakage and damage of a FPSO vessel is further restricting the growth of FPSO market during the forecast period. Moreover, legal complexities over proposed field and local content requirements is leading to delay in project execution and cost overruns, restraining the market growth.
Key opportunity of the global FPSO market lies in conversion of oil tankers, refurbishment and upgrades of FPSOs. Presently, majority of the FPSO contracts between FPSO providers and oil companies are based on the lease and operate structure. To meet the complex requirement for building and construction of advanced FPSOs, opportunities lies in collaboration and partnership among various players present in different stages of the value chain of FPSO industry.
This market research study analyzes the global FPSO market and provides estimates in terms of revenue (USD Billion) from 2015 to 2021. It recognizes the drivers, restraints and opportunities affecting the industry and analyzes their impact over the forecast period.
By geography, market is segmented into Americas, Europe, Asia, Africa and Oceania. In addition, the report segments the market based on the type, which include converted, new-build and redeployed. It also segments the market on the basis of water depth as shallow water (up to 499 meters), deepwater (500 meters to 1,499 meters) and ultra-deepwater (1,500 meters and above). All these segments have also been estimated on the basis of geography.
For better understanding of the global FPSO market, key trend analysis is also provided. Furthermore, the study comprises a market attractiveness analysis, where the types of FPSOs are benchmarked based on their market scope, growth rate and general attractiveness.
The report provides company market share analysis of various industry participants. The key players have also been profiled on the basis of company overview, financial overview, business strategies, and the recent developments in the field of FPSO. Major market participants profiled in this report include MODEC, Inc. (Japan), SBM Offshore N.V. (Netherlands), BW Offshore (Norway), Bluewater Energy Services B.V.(Netherlands), Aker Solutions ASA (Norway), Hyundai Heavy Industries Co., Ltd. (South Korea), Bumi Armada Berhad (Malaysia), Yinson Holdings Berhad (Malaysia), Teekay Corporation (Bermuda) and Samsung Heavy Industries Co., Ltd.
Global FPSO Market: By Type
Global FPSO Market: By Water Depth
- Shallow water
Global FPSO Market: By Geography
- Southeast Asia
- West Africa
- Rest of Africa
- New Zealand
The report provides a cross-sectional analysis of all the above segments with respect to the following regions: