Offshore staff
LONDON – More FPSO leases are set to expire in 2022 than in recent years, according to analysis by Westwood Global Energy Group.
Potentially 30 floaters could become available by the end of next year.
Westwood’s Global Floating Production Systems (FPS) report found that if no contract extensions were taken on currently leased FPSOs, 14 additional units would become available in 2022.
However, if all available extension options were assumed, nine units would come off-contract adding to the 16 currently awaiting upgrades or redeployments.
Among those due to end contracts in 2022, 36% are 40-plus years old and could therefore be candidates for scrapping.
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.”
But E&P companies with marginal reserves could seek to take advantage of the currently higher oil prices and FPSO availability to speed project sanctioning.
“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,” Adeosun added.
“We expect to see up to 17 FPS awards, valued at ~$18 billion over 2021, up 72% on our Q4 2020 outlook.”
05/19/2021
