44218 - fpso market
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Describe the perspective for PFSO market in 2015TRANSCRIPT
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What Lies Ahead In The Months To Come?Tim HaidarSummer 2015
What Lies Ahead In The Months To Come?Tim HaidarSummer 2015
IN ASSOCIATION WITH
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Despite the oil price downturn cycle we are currently experiencing, analysts
estimate that the floating production, storage and offloading (FPSO) sector is
likely to see between $80-$120 billion-worth of investment through 2019.
While that has been rounded down from previous projections of $160 billion over the same
time period, it still equates to the GDP of Angola dedicated exclusively to mobile
hydrocarbon production units.
Within industry, everybody has agreed that 2015 will be one of the most challenging years
in recent memory. Now that Q1 is firmly behind us, here are a few predictions that we think
will shape the FPSO industry in the next nine months...
FPSO Predictions For 2015
WHAT LIES AHEAD IN THE MONTHS TO COME?
DECELERATION OF MARGINAL FIELD DEVELOPMENT
The advent of the FPSO in the
late 1970s and its evolution
across the coming decades made
the monetisation of worlds
marginal fields a palpable
reality.
The recent drop in oil price has meant
that the only FPSO projects that are
absolutely guaranteed to come to first
oil are those that will still be
economically-viable around the $70
per barrel mark. To limit capital
expenditure, it is likely that even these
endeavours will be rolled out as
phased developments.
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FPSO Predictions For 2015visit www.OilandGasIQ.com
RESTRUCTURING, REDUNDANCIES, PREDATION, CONSOLIDATION
So far in 2015 we have seen two mega-mergers on both the operator and
service provider side, with Halliburtons takeover of Baker Hughes for
$34.6 billion and Royal Dutch Shells purchase of BG Group for $69.7
billion.
In the remaining three quarters of 2015, we will doubtless see the bigger players in
the FPSO arena cannibalise their smaller competitors.
In the quest to bring down capital and operational expenditures, headcount will be
shed in record redundancies and companies will be reorganised inline with lean
management principles.
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FPSO Predictions For 2015
INCREASED FOCUS ON ASSET INTEGRITY AND
ENHANCED OIL RECOVERY (EOR)
When the price of a barrel of the black stuff dips below previously
profitable levels, it is only natural that the industrys concerns point
inward.
Producing assets across the globe are hunkering down to ride out the storm by
concentrating on the core principles of production optimisation and life extension
getting more from less as safely as possible.
Part of the drive towards higher production yields will revolve around tertiary
recovery to ensure the productivity of the mid-late stage lifecycle for FPSOs.
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FPSO Predictions For 2015
THE PETROBRAS SCANDAL WILL LEAD TO A SINKING FEELING
Petrleo Brasileiro S.A., the semi-public Brazilian multinational energy
corporation - and operator of one tenth of the extant FPSO fleet has been
suffering seismic shocks to the system since March 2014.
The government investigation codenamed Operao Lava Jato (Operation Car Wash), uncovered deep-rooted and systemic corruption at the heart of South Americas largest
company and caused the breakdown of its corporate hierarchy. Petrobras lost $16.8
billion in Q4 2014 and its foreign credit rating slipped from Baa1 to Baa2, one of the
lowest investment grade ratings.
The development of Petrobrass deep water pre-salt assets is reliant on its use of FPSO
units: the company had planned to award at least 14 new FPSO contracts over the next
three years. The ramifications of Operation Car Wash, combined with softening oil prices
have put into sharp relief its ability to fulfil these ambitions.
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FPSO Predictions For 2015
STANDARDISATION WILL BECOME MORE THAN A BUZZWORD
Although it will be impossible to fully standardise a project based on the
bespoke needs of every situation, the FPSO industry will have to start
paying more than lip service to developing prototypical templates in
order to embrace time and cost-saving demands.
Understanding and redefining what standardisation actually means in the context of
components, equipment, and work activities will be critical for the sector to escape
the vortex caused by nose-diving oil prices and win in the upturn to come.
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FPSO Predictions For 2015
COLLABORATION FOR INNOVATION
Times of conflict are usually the periods that see the most technological
advancement, and there is no doubt that the oil and gas industry has been
in the thick of battle for some months now.
We will see a lowering of the traditionally confrontational barriers that stymie the
sharing of information, as E & P rivals work together to find innovative solutions for
cost reductions without compromising on safety, quality, and regulatory requirements.
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FPSO Predictions For 2015
IRAN TO ENTER THE FPSO FRAY
After the mollification of sanctions meted out to the Islamic Republic of
Iran since 2006, Western Asias most populous nation will turn to floating
units for the exploitation of offshore reserves.
The South Pars field, jointly-controlled by Iran and Qatar, holds 51 trillion cubic metres of
in-situ natural gas and approximately 50 billion barrels of natural gas condensates.
As Iran reached Phase 12 of 29 steps of development for the field, FPSOs will become an
integral part of this state-critical resource. As of January 2015, Petroiran Development
Company Limited (PEDCO) affirmed that a contract had been signed to purchase an FPSO
for exploitation of the liquid hydrocarbon layer.
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