World Floating Production Market Forecast 2015-2019

World Floating Production Market Forecast 2015-2019energy business insight

e: [email protected] t: +44 (0)203 4799 505

www.douglas-westwood.com

Aberdeen | Faversham | Houston | London | Singapore

• Prospects• Technologies• Markets

X

X

X X

XXXX

X

Floating production deployment spend to total $81 billion 2015-2019 but orders in declineDouglas-Westwood’s new World Floating Production Market Forecast 2015-2019 forecasts that despite the current low oil price environment, between 2015 and 2019 $81 billion (bn) will be spent on FPS units – an increase of 73% compared to 2010-2014. The value of annual installations is projected to grow from nearly $12bn in 2015 to $21bn in 2017 before declining to $17bn in 2019. Projects already ordered will account for much of this spend.

Despite Capex growth, the outlook this year for or-ders is poor. The low oil price is expected to impact the market, leading to a number of delayed project sanctions. This can be seen in the declining num-ber of orders for 2015 and subsequent installation decline in 2018. Projects already under construction are unlikely to be affected.

FPSOs represent by far the largest segment of the market both in numbers (87 installations) and fore-cast Capex (81%) during 2015-2019. TLPs account for the second largest segment of Capex (9%) with FPSSs third (7%).

Latin America will see nearly a third of the 110 installations forecast and 32% of the projected Capex. Asia accounts for nearly a quarter of fore-cast installations, but only 13% of spend. Africa is important in value terms, with 22% of the projected Capex. Western Europe is expected to form 15% of forecast spend. Deepwater expenditure will make up 68% of the global FPS market.

Financing remains a challenge for leasing contractors and smaller E&P companies as a result of the lower oil prices. Low oil prices have placed additional strain on company budgets and greater efforts are being made to ensure delays and cost over-runs are avoided. Local content requirements are also push-ing up prices and extending lead times, particularly in Brazil.

The World Floating Production Market Forecast 2015-2019 report is now in its 13th Edition and is supported by analysis, insight and industry consulta-tion and includes:

• Drivers & indicators – a review of factors influ-encing the floating production market including global energy demand; continued development of offshore reserves; oil & gas prices, supply & demand; Brazilian activity, the role of deepwater.

• Operator analysis – Capex for the leading FPS operators, historic, forecast and by region and water depth.

• The FPS Supply Chain – detailed analysis of the FPS supply chain, outlining the EPC firms, ship-yards, lease contractors, topside fabricators and their respective capabilities.

• Leasing & Financing – the issues and future out-look for financing of the sector; analysis of major leasing contractors, their assets and a review of prospective vessel redeployments.

World Floating Production Market Forecast 2015-2019energy business insight

e: [email protected] t: +44 (0)203 4799 505

www.douglas-westwood.com

Aberdeen | Faversham | Houston | London | Singapore

To Order

Complete the order form and mail, fax or email us your

details.

Payment: goods will only be dispatched on receipt of

payment in full. A pre-payment invoice will be issued on

request. Payment must be made in UK Pounds. Payment

may be by a cheque drawn on a UK bank.

Credit card owners: give full name and address of the

cardholder and telephone number - you will not be billed

until dispatch.

Copyright: you agree that this report is the copyright of

the authors; it is for use only within your own organisation,

will not be made available in any form to third parties and

will not be copied or transmitted electronically.

Multiple copies: special prices are available on request for

multiple PDF or hardcopies - please call or email for details.

Executive Presentation Service: a PowerPoint-based

presentation of the results of this report can be made by

our analysts at your company offices for an additional fee.

Please contact us for details.

Name ........................................................................................ Job Title ..............................................................................

Company .................................................................................................................................................................................

Deliver address ......................................................................................................................................................................

Cardholders address ............................................................................................................................................................

Card Number ......................................................................... CCV number .........................Expiry date .......................

Signature .................................................................................. Email ....................................................................................

Tel no. ....................................................................................... Fax ........................................................................................

EU companies must give an EU VAT number ...................................................................................................

Preferred format: Number of Users: PDF * Single User (1 copy) 3450 UK Pounds Hardcopy ** Multi-User (5 copies) 4450 UK Pounds

Payment Method: Pre-payment invoice AMEX / MasterCard / Visa

Order Form

I understand that the study is copyright and for use only within my organisation. It will not be copied, or otherwise circulated to third parties or distributed electronically. (please tick)

* VAT will be added when applicable** Hardcopy deliveries outside the UK will be via DHL couriers at an additional cost of UK Pounds 60

• Regional analysis – with trend commentary for

Africa, Asia, Australasia, Latin America, Middle

East, North America and Western Europe

Why purchase the World Floating Production Market Forecast?DW’s market forecasting is trusted by sector players

worldwide, with clients including the world’s top-10

oil & gas companies, top-10 oilfield services compa-

nies and top-10 private equity firms.

The report is essential for financial institutions, equip-

ment manufacturers, offshore engineering, construc-

tion, operations & maintenance companies and

contractors, oil & gas companies, lease contractors,

shipbuilders and agencies & government depart-

ments wanting to make more informed investment

decisions.

Our proven approach includes:

• Unique and proprietary data – updated year-

round from published sources and insight gained

from industry consultation.

• Detailed methodology – analysis is based on

DW’s in-house Oil & Gas database which details

around 700 FPS projects. The data feeds into the

market model to generate forecasts of floating

production systems in each region of the world.

Expenditure is allocated both to year of order

and year of installation

• Comprehensive analysis – comprehensive

examination, analysis and 10-year coverage of

floating production capital expenditure.

• Concise report layout – consistent with DW’s

commitment to delivering value for our clients,

all our market forecasts have a concise layout

consisting of industry background and supporting

materials condensed to enable quick review with

‘speed-read’ summaries of key points through-

out.

ISBN 978-1-910045-10-7

"Exactly what we needed"- Equipment Supplier

"An excellent report"- Engineering & Construction Company

2015

World Floating Production

Market Forecast

Prospects, Technologies, World Markets

2015-2019

© 2015 Douglas-Westwood 2World Floating Production Market Forecast 2015-2019By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood

Contents

Table of Contents

1 Summary and Conclusions ......................................8Summary ......................................................................................................................................... 9

Conclusions .................................................................................................................................. 10

2 Macro Economic Overview ................................. 11Global Energy Demand Drivers: Population & GDP Growth .......................................... 12

From Black to Green ................................................................................................................. 13

Oil – Supply & Demand ............................................................................................................. 14

Oil Majors – End of Business as Usual? .................................................................................. 15

The Move to Offshore Oil & Gas ............................................................................................ 16

The Move to Deepwater ........................................................................................................... 17

Oil & Gas Challenges ................................................................................................................. 18

Brazilian Activity .......................................................................................................................... 19

3 FPS Types and Applications .................................. 20Offshore Production Platforms ................................................................................................ 21

The FPS Lifecycle ........................................................................................................................ 22

FPS Concept Selection ............................................................................................................... 23

Floating Production, Storage and Offloading Vessels (FPSOs) ........................................... 24

Types of FPSO .............................................................................................................................. 25

Floating Production Semi-Submersibles (FPSS) ..................................................................... 26

Types of FPSS ............................................................................................................................... 27

Spars .............................................................................................................................................. 28

Types of Spars .............................................................................................................................. 29

Tension Leg Platforms (TLPs) ................................................................................................... 30

Types of TLP ................................................................................................................................ 31

Types of Floating Production Systems – Summary ............................................................... 32

FPS Applications .......................................................................................................................... 33

4 Leasing and Financing ............................................. 34Financing ....................................................................................................................................... 35

FPS Leasing ................................................................................................................................... 36

Major Leasing Contractors ....................................................................................................... 37

Redeployments of Leased Units ............................................................................................... 40

5 The FPS Supply Chain ............................................ 41The FPS Supply Chain................................................................................................................. 42

Contractor Overview ................................................................................................................ 43

FPS Shipyards & Construction Facilities ................................................................................. 44

Local Content – FPS Construction ......................................................................................... 45

6 FPS Components .................................................... 46Hulls ............................................................................................................................................... 47

Topsides ........................................................................................................................................ 48

Mooring Systems ......................................................................................................................... 49

Critical Path Equipment Lead Times ....................................................................................... 50

Riser Systems ............................................................................................................................... 51

7 Transportation, Installation & Commissioning . 52Transportation, Installation & Commissioning ...................................................................... 53

Spar Installation ........................................................................................................................... 54

8 FPS Fleet ................................................................... 55The FPS Fleet ............................................................................................................................... 56

Fleet Analysis: Operator & Water Depth Distributions ..................................................... 57


Contents

Table of Contents

9 Market Forecast ...................................................... 58Market Forecast .......................................................................................................................... 59

Delays to Sanctioning & Commissioning ................................................................................ 60

The Global FPS Market by Region ........................................................................................... 61

The Global FPS Market by Vessel Type .................................................................................. 62

FPSOs ............................................................................................................................................ 63

FPSO Capex Breakdown ........................................................................................................... 64

FPSSs .............................................................................................................................................. 65

FPSS Capex Breakdown ............................................................................................................. 66

Spars .............................................................................................................................................. 67

Spar Capex Breakdown ............................................................................................................. 68

TLPs ............................................................................................................................................... 69

TLP Capex Breakdown .............................................................................................................. 70

Africa ............................................................................................................................................. 71

Asia ................................................................................................................................................ 72

Australasia .................................................................................................................................... 73

Latin America ............................................................................................................................... 74

Middle East ................................................................................................................................... 75

North America ............................................................................................................................ 76

Western Europe .......................................................................................................................... 77

Operator Analysis ....................................................................................................................... 78

The Deepwater FPS Market ..................................................................................................... 79

10 Appendix ................................................................ 80Floating Production Prospects ................................................................................................. 81

Data and Text Conventions ...................................................................................................... 84


Contents

Figures

Figure 1: Global FPS Capex by Region 2010-2019 .......................................................................................9

Figure 2: Global Population Growth & Energy Demand 1965-2012 ................................................ 12

Figure 3: Historic Primary Energy Demand by Region ............................................................................. 12

Figure 4: The Changing Energy Mix .................................................................................................................... 13

Figure 5: Climate Change (Temperature Change) ...................................................................................... 13

Figure 6: Oil Price & Demand ............................................................................................................................... 14

Figure 7: World Liquids Production Growth, 2005-2014 ..................................................................... 14

Figure 8: Oil Discoveries & Production ............................................................................................................ 15

Figure 9: Control of Oil Reserves ...................................................................................................................... 15

Figure 10: Global Oil Supply – Onshore/Offshore 1965-2020 ........................................................... 16

Figure 11: Global Deepwater Capex by Region 2009-2018 ................................................................. 16

Figure 12: Subsea Completed Wells by Water Depth ............................................................................. 17

Figure 13: Oil & Gas Production vs E&P Spend ........................................................................................... 18

Figure 14: Skilled Workers Age Category ....................................................................................................... 18

Figure 15: Brazillian Offshore Basins................................................................................................................... 19

Figure 16: The FPS Lifecycle ................................................................................................................................... 22

Figure 17: Completion Strategy and FPS Concept Selection ................................................................ 23

Figure 18: Typical Layout of an FPSO ................................................................................................................ 24

Figure 20: Typical Layout of an FPSS (Deep Draft) .................................................................................... 26

Figure 19: Typical Pontoon Arrangements ...................................................................................................... 26

Figure 21: Typical Layout of a Spar (Truss) ..................................................................................................... 28

Figure 22: Typical Layout of a TLP (Dry-tree) .............................................................................................. 30

Figure 23: Typical Lending Cycles in the Offshore Sector ...................................................................... 35

Figure 24: Major Leasing Contractors ............................................................................................................... 37

Figure 25: Leased Units on Contract by Region .......................................................................................... 37

Figure 26: Major Leasing Contractors’ Vessels Available for Redeployment (2015-2019) .... 40

Figure 27: The FPS Supply Chain ......................................................................................................................... 42

Figure 28: Major Shipbuilding Countries .......................................................................................................... 44

Figure 29: Typical Layout of Topside Modules .............................................................................................. 48

Figure 30: Spar Installation ...................................................................................................................................... 54

Figure 31: Global FPS Fleet ..................................................................................................................................... 56

Figure 32: Operator Distribution of FPS Fleet .............................................................................................. 57

Figure 33: Water Depth Distribution of FPS Fleet by Region .............................................................. 57

Figure 34: Global FPS Installation Capex by Region 2010-2019 ......................................................... 61

Figure 35: Global FPS Installation Capex by Vessel Type 2010-2019 ............................................... 62

Figure 36: FPSO Capex by Region 2010-2019 ............................................................................................ 63

Figure 37: FPSO Capex by Component Type 2010-2019 ..................................................................... 64

Figure 38: FPSS Capex by Region 2010-2019 .............................................................................................. 65

Figure 39: FPSO Capex by Component Type 2010-2019 ..................................................................... 66

Figure 40: Spar Capex by Region 2010-2019 ............................................................................................... 67

Figure 41: Spar Capex by Component Type 2010-2019 ........................................................................ 68

Figure 42: TLP Capex by Region 2010-2019 ................................................................................................ 69

Figure 43: TLP Capex by Component Type 2010-2019 ......................................................................... 70

Figure 44: FPS Capex – Africa 2010-2019 ..................................................................................................... 71

Figure 45: FPS Capex – Asia 2010-2019 ......................................................................................................... 72

Figure 46: FPS Capex – Australasia 2010-2019 ........................................................................................... 73

Figure 47: FPS Capex – Latin America 2010-2019 .................................................................................... 74

Figure 48: FPS Capex – Middke East 2010-2019 ........................................................................................ 75

Figure 49: FPS Capex – North America 2010-2019 ................................................................................. 76

Figure 50: FPS Capex – Western Europe 2010-2019 .............................................................................. 77

Figure 51: Leading FPS Operators Capex 2010-2019 .............................................................................. 78

Figure 52: Leading FPS Operators 2015-2019 by Region....................................................................... 78

Figure 53: Deepwater FPS Capex by Vessel Type 2010-2019 ............................................................. 79

Figure 54: Deepwater FPS Capex by Region 2010-2019 ....................................................................... 79


Contents

Tables

Table 1: Majors’ Oil Production ............................................................................................................................ 15

Table 2: Track Record of Project Installation (Excluding Extended Well Tests) ........................... 19

Table 3: Major Leasing Contractors & Their Units ..................................................................................... 38

Table 4: FPS Competitive Landscape (list not exhaustive) ..................................................................... 43

Table 5: Typical Mooring System Designs by FPS Type ............................................................................. 49

Table 6: Nine FPSO projects with delays ........................................................................................................ 60

Table 7: Global FPS Capex by Region 2014-2019 ...................................................................................... 61

Table 8: Global FPS Installations by Region 2014-2019 ........................................................................... 61

Table 9: Global FPS Capex by Vessel Type 2014-2019 ............................................................................ 62

Table 10: Global FPS Installations by Vessel Type 2014-2019 ............................................................... 62

Table 11: FPSO Capex by Region 2014-2019 .............................................................................................. 63

Table 12: FPSO Installations by Region 2014-2019 .................................................................................... 63

Table 13: FPSO Capex by Component Type 2014-2019 ....................................................................... 64

Table 14: FPSS Capex by Region 2014-2019 ................................................................................................ 65

Table 15: FPSS Installations by Region 2014-2019 ...................................................................................... 65

Table 16: FPSO Capex by Component Type 2014-2019 ....................................................................... 66

Table 17: Spar Capex by Region 2014-2019 ................................................................................................. 67

Table 18: Spar Installations by Region 2014-2019 ...................................................................................... 67

Table 19: Spar Capex by Component Type 2014-2019 .......................................................................... 68

Table 20: TLP Capex by Region 2014-2019 .................................................................................................. 69

Table 21: TLP Installations by Region 2014-2019 ....................................................................................... 69

Table 22: TLP Capex by Component Type 2014-2019 ........................................................................... 70

Table 23: FPS Capex – Africa 2014-2019 ....................................................................................................... 71

Table 24: FPS Installations – Africa 2014-2019 ............................................................................................. 71

Table 25: FPS Capex – Asia 2014-2019 ........................................................................................................... 72

Table 26: FPS Installations – Asia 2014-2019 ................................................................................................ 72

Table 27: FPS Capex – Australasia 2014-2019 ............................................................................................. 73

Table 28: FPS Installations – Australasia 2014-2019 .................................................................................. 73

Table 29: FPS Capex – Latin America 2014-2019 ...................................................................................... 74

Table 30: FPS Installations – Latin America 2014-2019 ........................................................................... 74

Table 31: FPS Capex – Middle East 2014-2019 ........................................................................................... 75

Table 32: FPS Installations – Middle East 2014-2019................................................................................. 75

Table 33: FPS Capex – North America 2014-2019 ................................................................................... 76

Table 34: FPS Installations – North America 2014-2019 ........................................................................ 76

Table 35: FPS Capex – Western Europe 2014-2019 ................................................................................ 77

Table 36: FPS Installations – Western Europe 2014-2019 ...................................................................... 77

Table 37: Leading FPS Operators 2014-2019 ............................................................................................... 78

Table 38: Deepwater FPS Capex by Vessel Type 2014-2019 ............................................................... 79

Table 39: Deepwater FPS Capex by Region 2013-2018 ......................................................................... 79

Table 40: Floating Production Prospects 2015-2019 ................................................................................. 81


Notes & Acknowledgements

About Us

Disclaimer

This report is a Douglas-Westwood (DW)

study and all rights are reserved, whether

this pertains to the body of the report or any

information contained within. The information

contained in this document is believed to be

accurate, but no representation or warranty,

express or implied, is made by Douglas-West-

wood as to the completeness, accuracy or

fairness of any information contained in it, and

we do not accept any responsibility in relation

to such information whether fact, opinion or

conclusion that the reader may draw. The

views expressed are those of the individual

authors and do not necessarily represent those

of the publisher.

While we have made every attempt to ensure

the information contained in this document

has been obtained from reliable sources,

Douglas-Westwood is not responsible for any

errors or omissions, or for the results obtained

from the use of this information. All informa-

tion in this document is provided “as is”,

with no guarantee of completeness, accuracy,

timeliness or of the results obtained from the

use of this information, and without warranty

of any kind, express or implied, including, but

not limited to warranties of performance, mer-

chantability and fitness for a particular purpose.

Nothing herein shall to any extent substitute

for the independent investigations and the

sound technical and business judgment of the

reader. Laws and regulations are continually

changing, and can be interpreted only in light

of particular factual situations.

World Floating Production

Market Forecast

is published by:

Douglas-Westwood Limited,

20 East Street

Faversham

Kent

ME13 8AS, UK

tel: +44 203 4799 505

fax: +44 1795 594748

[email protected]

© Copyright Douglas-Westwood

Limited 2015

By purchasing this document, your

organisation agrees that it will not

copy or allow to be copied in part or

whole or otherwise circulated in any

form any of the contents without the

written permission of the publishers.

Additional copies of this study may be

purchased at a specially discounted

rate.

DW report number 558-15

ISBN 978-1-910045-10-7

Production Team

Editor

Steve Robertson

[email protected]

Assistant Editor

Damilola Odufuwa

[email protected]

Report Authors

Balwinder Rangi

[email protected]

Ben Wilby

[email protected]


Douglas-Westwood’s Offerings

Notes & Acknowledgements

About Us

Established in 1990, Douglas-Westwood is

a leading provider of market research and

consulting services to the energy industry

worldwide. We have completed 1,000

projects for clients in more than 70 differ-

ent countries and in some 250 niche energy

segments. Our clients range from the oil &

gas majors and their contractors to financial

houses and governments. We are an

independent organisation and our research

is supported by proprietary data, insight

and knowledge. Our international reach is

backed up by one of the largest sector-

focused teams in offices in the Americas,

Europe and Asia.

Douglas-Westwood clients include the

world’s:

Top-10 oil & gas companies

Top-10 oilfield services companies

“Energy experts Douglas-Westwood”

The Guardian

Consultancy

With an extensive advisory team spanning

three continents, Douglas-Westwood deliv-

ers energy business consultancy services

across the globe. DW consultancy services

are focused on the strategic planning pro-

cess, helping our clients to make investment

decisions, develop and test advanced com-

petitive strategies for new products, new

business streams, mergers and acquisitions,

We provide consultancy services through

advanced market insight, modelling and

simulation to a client base which includes

players in oil & gas E&P, oilfield services,

conventional & renewable energy and the

public sector.

Douglas-Westwood has supplied con-

sultancy services to over 250 companies

worldwide.

“Foremost oilfield services

market consultant”

Hong Kong client

Transactions

Douglas-Westwood provides sector-

focused commercial due-diligence and

transactions services to major and mid-tier

private equity firms, investment banks

and debt providers. We have industry-

leading credentials including both buy-side

and sell-side mandates, public-to-private

transactions, re-financing, IPOs and project

financing ranging in enterprise value from

$5 million technology firms to $1 billion

oilfield service, engineering and equipment

companies.

Douglas-Westwood clients include the

world’s:

Top-10 private equity firms

Top-10 investment banks

“Douglas-Westwood provides

great value to us”

Perth client

Research

Business research, analysis and market

forecasting is our core activity. Over the

years we have built a huge knowledge base

of both sectors and players. Our experience

of researching the oilfield services sector

(OFS) is unparalleled worldwide. We spe-

cialise in emerging markets and technolo-

gies, from offshore windpower to subsea

processing and difficult to access markets

and geographies including Russia and the

Middle East. Our custom research offerings

include: gathering & analysis of market data,

independent marketing and forecasting,

measurement & analysis of competitive po-

sitions and industry consultation & in-depth

perception surveys.

Douglas-Westwood have researched some

250 different business sectors to wide

international acclaim.

“Top energy research group

Douglas-Westwood”

Financial Times

Publications

Douglas-Westwood produces original en-

ergy business market studies and forecasts,

now highly acclaimed and used worldwide.

In oil & gas we were the first firm to

forecast & value the growth of key offshore

markets such as deepwater, subsea produc-

tion, global onshore drilling, pipelines and

offshore wind power.

Our reports are geared to meet senior

executives’ needs in business planning and

decision-making and assume no previous

reader knowledge of the subject area. Each

offers a concise, region by region format.

Analysis is based on our extensive in-house

project databases and models combined

with forecasting expertise developed over

many years.

Douglas-Westwood has over 20 energy

sector market forecast titles in print.

“An excellent report in all areas”

Houston client

Economy & Finance

World Floating Production Market Forecast 2015-2019