Floating production back in vogue

Demand for floating production systems is growing, according to Westwood Energy’s updated World Floating Production Systems Tracker.

Capex for both installations and orders has increased by 12% and 22% respectively, compared to findings of the first quarter 2017 edition.

Westwood now estimates an order backlog of US$45 billion and installation expenditure of US$57 billion between 2017 and 2021. This is due to increased confidence in the market and lower field development costs.

To date this year ten floaters have entered service, including high-capex units ordered prior to the downturn such as the P-66 and Armada Olombendo.

Eleven floating production systems have been ordered this year, headed by the Liza and Sépia FPSOs and the Mad Dog Phase 2 semi-submersible.

Latin America will remain dominant in the sector, Westwood believes, accounting for 32% of capex and 36% of installations. Much of this will be directed at Petrobras’ fields in water depths of up to 1,000 metres (3,280 feet), for units ordered in 2010 and which are still to be installed.

However, installation expenditure will be more than US$5 billion across Africa, Asia, North America, and Western Europe.