By OGJ editors
HOUSTON, May 14 -- Over the next 5 years, about 120 floating production systems (FPSs) are to be installed worldwide, involving capital expenditures of about $32 billion, according to a report released May 5 by analyst Douglas-Westwood Ltd. at the Offshore Technology Conference in Houston.
According to the fourth edition of the study, World Floating Production Report 2004-08, capital expenditures for FPSs is on track to exceed $8 billion/year, the analyst reported. Most of this amount, some 68%, will be spent on an estimated 84 floating production, storage, and offloading vessels, said the report's chief author Steve Robertson.
"The overall picture is one of strong market growth from 2004 onwards, with annual global expenditure in the FPS sector rising from an estimated $4.8 billion in 2004 to reach $7.8 billion in 2008," Robertson said. "An expenditure peak is expected in 2007, when the annual spend is expected to reach $8.3 billion."
Country, regional breakout
Including floating units of all types, and in terms of the overall market, Robertson said that he expects West Africa to lead expenditures over the next 5 years, at some $10 billion. Brazil, however, also will see "a strong surge in investment," the study noted. Also, North America will see "good growth" and is likely to place second-highest, with a forecast spend of more than $7 billion, it said.
"The other main characteristic of the market will be the continuing shift to deepwater," said Robertson. "We forecast that 70% of the global spend will be on floaters moored in water depths of 500 m or greater."
The Gulf of Mexico and Brazil dominated the deepwater market over the last 5 years, Robertson said, accounted for more than three fourths of the total spend.
"The market distribution for the 2004-08 period is markedly different, the main change being the high growth in the value of deepwater activity off the west coast of Africa," Douglas-Westwood reported.
The analyst forecast capital expenditures of about $8.5 billion associated with deepwater FPS installations in Africa, "making the region the world's leading deepwater FPS theatre."
The other regions also will experience increases in deepwater FPS activity, the analyst said, with North America's spend rising to $7 billion and Latin America's to $4.9 billion.
Meanwhile, Australia looks set to see its first deepwater deployment, with Woodside Petroleum Ltd.'s Enfield FPSO installation slated for 2006, Douglas-Westwood noted. And off Asia, a total of 9 installations—5 tension-leg platforms, 2 spars, 1 barge, and 1 FPSO—are forecast with a total capex of $1.7 billion, the analyst said.
