Around 30 production floater contracts are now queued up for award over the next 18 months, assuming no major market disruption occurs and the supply chain can absorb the orders within this time frame. That’s the conclusion of an in-depth market analysis just completed by IMA/WER.
The market surge is being driven by crude prices that have climbed to the mid-$80s on fast rebounding oil demand growth, supply constraints by OPEC+ and inadequate investment by upstream players to replace production.
According to Jim McCaul, Managing Director of IMA/WER, “the deepwater production market has turned red hot. The queue of near-term project starts has grown each month since Q1. We now see 25 FSPO and 5 FPU contracts lined up for award by early 2023.”
McCaul said:“The principal constraint on near-term production floater orders is not market demand – it’s the ability of the supply chain to absorb 30 new contracts over the next 18 months without costs and delays exploding.”
IMA/WER’s floating production report has up-to-date details and contracting status for more than 200 floater projects in the planning stage. Around 55% of these envisage use of an FPSO. Another 10% will require a production semi.
The rest are LNG and floating storage projects. The report also has details for 45 production or storage floaters on order, more than 300 floating production units in service and 40 production floaters available for redeployment contracts.
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