Offshore staff
(UK) - The global market for floating production systems, which has grown consistently throughout the past decade (both in terms of units and expenditure), is forecast to continue to develop through to 2010, with the announcement of new projects and increased innovation expanding the sphere of opportunity.
The third edition of Infield Systems Ltd.'sGlobal Perspectives Floating Production Market Update to 2010 offers this analysis of the market's global growth and underlying drivers for its continuation.
The last five years have seen acceleration in the rate of the growth of this market, on the back of the increased development of deep and ultra deepwater fields.
This trend is expected to continue in numerical, if not financial, terms.
A total of 138 units are forecast to be installed in the period to 2010, compared with 73 in the past five years.
Sixty-two of the units expected to come onstream through to 2010 will be located in deep or ultra deepwaters, compared with just 34 between 2001 and 2005.
Infield believes that financially, the industry is approaching the peak of capital expenditure on the current wave of floating production systems, which is expected to occur this year with an annual expenditure totaling over $6.7 billion.
The analysts say this is not to suggest that the market is entering a period of long-term decline, but that a combination of a significant number of hub developments, within a short timeframe, has created an artificial spike in market spend.
While the surge in current market activity in Asia and Latin America is a major factor strengthening floating production capital expenditure for the period to 2010, the continued dominance of large floating production projects offshore West Africa (driven by such key deepwater FPSO installations as Kizomba C, Plutonio, Akpo and Agbami) is the defining characteristic of market activity through to 2010.
While subsequent levels of activity are expected to tail-off slightly in the currently booming Asian and Latin American markets, annual expenditure in Africa for the period to 2010 will not peak until 2010 (reaching approximately $2.2 billion).
Global prospects out toward 2008/09 and beyond show an increase in the number of proposed facilities, but these will be more varied in size, design, and field objectives.
Floating production activity is forecast to experience growth in every region other than North America through the period 2006-2010, relative to the previous five-year period.
High oil prices have had the effect of moving forward the list of identified prospects waiting to be developed, particularly in shallow waters.
The vast majority of floating production facilities due to be installed over the next five years are increasingly directed toward specific fields with smaller associated developments and so are, on average, smaller and less capital intensive.
Infield says it has continually expressed the belief that the current driver of global activity, deepwater developments, would experience a relative slowdown in comparison with the hectic nature of the last few years.
The deepwater sector is still moving ahead, representing 59% of expenditure over the next five years, but without the concentration of multiple large projects that have artificially inflated the expenditure profile of the last few years.
The relative balance between newbuild and converted vessels is expected to be maintained even as the number of facilities increases and the overall value decreases.
As the demand for floating production systems continues to grow, Infield sees an increasing number of redeployments, a phenomenon expected to continue, even with its inherent difficulties, partly as a consequence of schedule pressures, but also a reflection of small field developments becoming economic under the current oil price.
05/02/06
