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The floating production systems market is expected to grow at a CAGR of over 10% during the forecast period of 2020 – 2025. Factors such as increased offshore exploration activity and focus on development of offshore oil and gas production, are expected to help drive the market for floating production systems. However, the high cost of FPS systems combined with volatile nature of oil prices have somewhat hampered the growth of the market.
- Floating Production, Storage and Offloading (FPSO) makes up the largest share of the floating production systems market, because of its additional function of storing produced oil. FPSO dominates the market with over 60% of the market share, globally.
- South America is anticipated to dominate the market growth due to widespread development of offshore exploration fields in countries such as Brazil and future investments in shale play exploration in Argentina.
- The demand for oil and gas production have always been on an increase, which have led to increased exploration activities in offshore. This in turn is expected to act as an opportunity for the market in the forecast period.
Key Market Trends
Floating Production, Storage and Offloading (FPSO) to Dominate the Market
- FPSO are the most popular floating production system because of its additional feature of storing and offloading produced crude oil. This have led FPSO’s to have over 60% of the market share which is expected to grow in the forecasted period.
- FPSO provides the capability of long distances movement, which provides the operator a chance to using it over different regions and fields over it’s life.
- Brazil have deployed the maximum number of FPSO’s and is expected to continue to do so, with almost 20 expected new deployments by 2025.
- The increasing energy demand is expected to drive the floating production systems market during the coming decade, as the new exploration activity is at an all-time high and the operators are often forced to work in much deeper waters, which require sophisticated technology and equipment, and also need the capability of storage and offloading oil, thereby helping drive the FPSO market.
South America to Dominate the Market Growth
- The offshore oil & gas industry is expected to witness massive investments between 2016-2025. The total global investments in offshore projects is expected to cross USD 800 billion by 2025.
- The two offshore projects in Brazil, namely, Libra and Itapu, are expected to get USD 15.8 billion worth of investments, with USD 2.2 billion just in signing bonuses in 16th Bidding Round held in October 2019, providing a way to increase in wireline and perforating services.
- In Brazil, the offshore pre-salt layer have production have reached over 1.5 million bpd in 2018, with pre salt production contributing over 55% in the country’s total oil production. The pre salt oil is produced from wells drilled during the last decade.
- Petrobras is expected to deploy up to 20 planned and announced FPSO’s in the forecasted period, for the purpose of increasing its offshore oil production by 1.5 million barrel per day.
- Therefore, factors such as rising oil and gas investments along with development of shale plays and pre salt layers in the region are expected to give a growth to the floating production systems market in the forecasted period.
The floating production systems (FPS) market is consolidated with some of the top players holding major part of the market. The key players are Bumi Armada Berhad, Hyundai Heavy Industries Co. Ltd, Keppel Offshore & Marine Ltd, Malaysia Marine and Heavy Engineering Berhad, Mitsubishi Heavy Industries Ltd, Samsung Heavy Industries Co. Ltd,among others.
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