The offshore oil and gas industry is expected to see a slight 1% year-on-year growth in engineering, procurement, and construction (EPC) contract awards in 2025, reaching US$54 billion, according to Westwood Global Insights.
This increase is supported by 53 field final investment decisions (FIDs), including greenfield and brownfield developments.
High supply chain costs, persistent since 2022, and delays in project timelines are limiting growth. These challenges have driven operators to revise field concepts and retender projects, Westwood said. Additionally, subdued Chinese oil demand and OPEC+’s decision to extend output cuts into 2025 signal a softer global oil market. Projects with high breakeven costs are particularly at risk of delays.
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Despite these hurdles, Westwood forecasts demand for over 290 subsea tree units, 18 floating production units (FPUs), 90 fixed platforms, 3,650km of subsea umbilicals, risers, and flowlines (SURF), and 2,660km of line pipes in 2025. The FPUs include four floating liquefied natural gas (FLNG) units, with a combined capacity of 959,000 barrels per day of oil, 3.2 billion cubic feet per day of gas, and 15.1 million tonnes per annum of LNG.
In 2024, floating production systems (FPS) made up 44% of offshore EPC contract awards, valued at $23 billion. Key projects included Petrobras’ P-84 and P-85 units, TotalEnergies’ GranMorgu floating, production storage and offloading vessel (FPSO), and ExxonMobil’s Jaguar FPSO in Suriname and Guyana.
For 2025, FPS is expected to account for only 33% of awards, as eight of the 18 planned FPS units involve upgrades and redeployments to reduce field development costs.
Major FPS projects slated for sanction in 2025 include Eni’s Baleine Phase-3 (Ivory Coast), Geng North (Indonesia), and Coral Norte (Mozambique), Shell’s Gato do Mato (Brazil), Petrobras’ Barracuda-Caratinga replacement (Brazil), UTM Offshore’s Yoho FLNG (Nigeria), Petronas’ Kelidang Cluster (Brunei), and Nisga’a Nation’s Ksi Lisims LNG project (Canada).
However, sanctioning timelines for these projects remain subject to revision.