Offshore staff
OSLO, Norway – Rystad Energy expects fabrication yards to be busier from next year onwards as offshore investments begin to climb.
Operators will be looking for yards to build new facilities, with 40% of contracts over the next five years likely to be for FPSOs.
With the industry still cautious on costs, Chinese yards should be better positioned than most to respond, Rystad analysis suggests.
Asia leads construction and conversion of FPSOs, with the main sites for hull construction in China, Singapore, South Korea, and Japan.
All offer lower-cost labor and material prices, combined with large capacity.
In terms of hull construction costs for a newbuild FPSO, Chinese yards, although scoring low on productivity, emerge as the most competitive with 30% lower prices than their Japanese rivals, the consultant found.
On average, a hull in a Chinese yard costs $94/cu m, compared with $111 for South Korea, $128 for Singapore, and $135 for Japan.
Sara Sottilotta, energy service research analyst at Rystad, said: “Even if Chinese productivity is the least competitive, low wages compensate for the productivity deficit, allowing the country to offer the most competitive hull construction costs in the region.”
China is said to have the lowest labor rates (less than $5/hr), followed by Singapore ($11.8). Japan and South Korea have more than twice the Chinese mean hourly wage at $15.6 and $16.5, respectively.
10/13/2020
