Norway-based Rystad Energy said in a report on Thursday that the FPSO market is booming this year, with more contracts awarded in the second quarter of 2021 than during the full year 2020. The consultancy group expects FPSO awards to reach a total of 10 units in 2021, with another 10 following next year, creating a very healthy project line-up for contractors, effectively doubling their pipeline.
Rystad Energy said four FPSOs were awarded in the second quarter and another four will be awarded before the end of the year. Including the two awards from the first quarter, this will bring the total tally up to 10 FPSO contract awards in 2021 – more than triple the three awards from 2020 – signaling a rapid comeback in FPSO contracting activity, despite the pandemic.
The four FPSO contracts expected to be awarded before the end of the year include the Mero 4 and Parque das Baleias in Brazil, Limbayong in Malaysia, Liuhua 11-1 in China.
“It’s not those contractors were out of business, there are currently over twenty FPSOs under construction, one of which is likely to start-up already this year. But after a weak 2020, the recent awards and the expected ones are doubling the pipeline, ensuring manufacturers will keep busy in the years ahead,” says Aleksander Erstad, Energy Service Research Analyst at Rystad Energy.
ExxonMobil is preparing for the delivery of its second FPSO later this year for its Liza operations offshore Guyana. SBM Offshore is building the 220,000 barrels per day Liza Unity floater which is expected to arrive in the South American country around September/October.
“Another 10 projects are likely to be awarded in 2022, with the year expected to match 2021 in terms of FPSO awards,” Rystad Energy said. “Most of the FPSO awards come from Latin America with four units bound for Brazil and one for Guyana. Angola and the UK are likely to see two awards each, and one is lined up for Australia.”
For Guyana, contracts have been confirmed for the giant Prosperity FPSO for Exxon’s Payara Development Project which is expected to start-up in 2024.
Additionally, the Yellowtail Development is expected to be sanctioned next year which will see another FPSO being ordered for the mega 250,000 barrels per day project which is targeting start-up in 2025.
The U.S. oil major is projected to expend around US$50 billion in project sanctioning over the next 10 years for its offshore development activities in Guyana that will see several FPSOs being delivered by the end of the decade.
“We believe that ExxonMobil and its partners could commit at least one new FPSO unit each year for the next ten years to Guyana. So, we also estimate that more than 1.2 million barrels a day of production could be sanctioned by 2025,” Schreiner Parker, Rystad Energy’s Vice President for Latin America and the Caribbean told OilNOW in a previous interview.