In its recently published Q3 2015 Floating Production Systems Report, Energy Maritime Associates (EMA), analyzed the latest market activity for all types of Floating Production Systems: FPSO, FLNG, FSRU, TLP, Spar, Semi, FSO, and MOPU.

What happened in Q2 2015? 3 Units were awarded, worth over $2 billion: 1 Production Semi and 2 FSRUs 9 units were delivered: 2 FPSOs, 1 FSRU, 1 Spar, 4 FSOs and 2 MOPUs 4 units were decommissioned: 2 FSOs were scrapped and 2 small FPSOs for well testing are now available

Petrobras Pulls Back & Revises Schedules Petrobras released its long-awaited 2015-19 business plan, which drastically reassessed its future production, the number of new production units required, as well as the schedule for units currently on order. The latest plan revised the number of new floating production units from 14 to 5. These will be leased units to be awarded in 2016-2017 for delivery in 2019-2020. 17 FPSOs are currently on order for Petrobras: 12 owned and 5 leased. The leased units, which are being provided by Modec, SBM and Teekay are currently on schedule. The owned units, which were to be built by Brazilian contractors, have encountered further delays and some work has been re-contracted to Chinese yards. Delivery of these units is now scheduled for 2017-2020+. Planned divestment of $57.7 billion by 2018 should provide opportunities for new operators in Brazil and reinvigorate demand for floating production systems.

Slowdown Expected to Continue through 2015 After four awards in Q1 and three awards in Q2, little contracting activity is anticipated in Q3, as oil companies continue to reduce spending. It is possible that some new awards could be placed before year end, with more likely in 2016 after annual budgets are reset.

According to EMA’s Managing Director David Boggs, “As anticipated, there were few awards in the first half of 2015. The second half of the year is expected to be worse, as project sanctions continue to be delayed due to cost pressures. However, developments continue to move through the planning pipeline and companies are waiting for the right time to lock-in attractive pricing. We believe more projects will achieve FID toward the end of the 2015 and into 2016.”

Tags: Energy Maritime Associates (EMA)