Douglas-Westwood: Expenditures for floating production systems to rise through 2007

By OGJ editors
HOUSTON, May 5 -- Oil and natural gas companies' capital expenditures on floating production systems (FPSs) are expected to reach $32 billion over the next 5 years compared with the $17 billion spent over the last half decade. Currently, there are 116 floating production systems being installed worldwide, according to a soon-to-be released study by Douglas-Westwood Ltd. and industry data specialist Infield Systems. The study will be launched Monday in Houston at the annual Offshore Technology Conference, the analysts reported.

Floating production, storage, and offloading vessels will comprise the bulk of these production systems, Douglas-Westwood said. About 77 FPSOs are expected to be built over the next 5 years at a cost of $21 billion, or 67% of the forecast spend. The remaining capex will be spent equally over the next 5 years on the following FPSs: 10 floating production semisubmersibles (FPSSs), 16 tension-leg platforms, and 13 spars, according to the study.

"The past year has seen some quite significant changes in terms of the numbers of floater prospects on screen," said Infield Systems data manager Roger Knight. "A considerable number of existing prospects have slipped backwards in time, some have been rejected in favor of alternative development scenarios, and others—particularly in Western Europe—now appear much less compelling," he added.

"Deepwater is undoubtedly the most influential driver for growth in this sector, said Douglas-Westwood's Dominic Harbinson, the study's lead author. "We reckon that the world's three major deepwater regions will account for around 75% of the capex forecast for the period 2003-07," he said, adding, "Despite dampening effects such as structural changes in the North Sea, and political pressures in countries such as Brazil, the sector seems poised for strong growth."

The next 5 years "should see a lot of 'firsts,'" Harbinson noted. These will begin with the introduction of dry completion concepts into the African and Asian regions, and possibly the first FPSO in the US Gulf of Mexico, he said, adding, "not to mention the potential for floating LNG plants and other innovative floater concepts."

The study pinpointed Africa as the area expected to get the "lion's share" of future activity in the sector, with 34 installations and investments of nearly $12 billion destined for the region over the 5-year period.

"Asia is second only to Africa in terms of the number of vessels forecast for the period. However, its capex ($5.5 billion) is lower than that forecast for North America ($7.4 billion) and not far ahead of Latin America ($4.4 billion) —regions where newbuilds and/or higher specification vessels predominate," Douglas-Westwood said.

Related Articles

Oil-price patterns—1: Oil prices reflect uneven growth rates of global demand and supply

04/07/2014

The price of oil rose from below $30/bbl to more than $145/bbl (all in money of the day) between 2004 and 2008. This was unprecedented.

Shell starts crude oil exports from Iraq’s Majnoon field

04/07/2014 Royal Dutch Shell PLC has exported its first shipment of crude from Iraq’s Majnoon field after surpassing its initial commercial production target....

Talisman aims to divest Timor Sea assets

04/07/2014 Talisman Energy Inc., Calgary, has placed its Timor Sea production interests up for sale in a move to exit the Kitan and Laminaria-Corallina oil fi...

Statoil starts production from Gudrun field in Norwegian North Sea

04/07/2014

Statoil ASA and partners have started oil and natural gas production from Gudrun field in the Norwegian North Sea.

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected