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FPSOs “Based on our analysis of future market conditions, we are forecasting orders for 41 to 56 FPSOs and 8 to 12 FPUs between 2020 and 2024.

The construction contracts are expected to generate expenditures of $56 to $77 billion. Brazil is expected to account for 30 to 40% of the FPSO orders over the next ? ve years.” exploration and appraisal (25), priority prospect (seven) or Here’s how we see the market situation between 2020 and commercial framework negotiation (two). 2024.

The remaining 25 projects in the planning queue are stalled.

Some are stalled due to economics. Some are awaiting ? eld In the (mostly) positive category are: partner or agreement on ? eld commercial terms. Others are • Future demand growth – Oil demand is likely to grow stalled by government opposition, ? eld rights issues, operator 0.9 to 1.3% annually through the 2020s, then taper off in failure or sanctions that prevent the project moving forward the 2030/50 timeframe, perhaps eventually peak in the (Exhibit 4). second half of the century.

• Deepwater future supply role – Deepwater production

Five Year Outlook for Contracts now accounts for approximately 10% of global oil sup-

While 130 FPSO/FPU projects are at various stages of de- ply and we expect it will continue to provide 8 to 12% of velopment planning, underlying market conditions will in- world oil supply over the next 20+ years.

? uence if and when individual projects move forward to the • Supply disruption risk – Global supply of oil and natu- investment commitment and placement of a ? oater construc- ral gas is fragile and the possibility of major supply dis- tion contract. ruptions very real; the disruption threat incentivizes in-

IMA/WER each year looks in detail at conditions likely to vestment in deepwater development as a supply security exist in the deepwater market over the following ? ve years. cushion.

Exhibit 3:

Exhibit 4: Stage of Development of 130 FPSO/FPU Projects in the Planning Queue (as of 1/1/20; Excludes FLNG, FSRU and FSO Projects)

Source: IMA/World Energy Reports Database Source: IMA/World Energy Reports Database 26 Maritime Reporter & Engineering News • February 2020

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