Market Overview
The Global FPSO Market reached USD 14.2 billion in 2022 and is expected to reach USD 23.5 billion by 2031, growing with a CAGR of 6.5% during the forecast period 2024-2031. The growing demand for LNG has spurred the development of floating LNG (FLNG) projects. FLNG facilities are essentially FPSOs designed explicitly for producing and liquefaction natural gas at sea. FLNG projects offer advantages in terms of scalability, cost-efficiency and environmental impact, further driving the growth of the global FPSO market.
Energy companies are seeking ever-larger FPSOs to fulfill growing operational demands. For instance, in early 2023, Petrobras, the Brazilian energy company, recently took delivery of a large new FPSO with a production capacity of 150,000 bpd of oil and 6 million cubic meters of natural gas. The FPSO will be deployed at the Itaipu offshore field off the coast of Brazil and will commence full production by the end of 2023.
Market Summary
| Metrics | Details |
| CAGR | 6.5% |
| Size Available for Years | 2021-2030 |
| Forecast Period | 2024-2031 |
| Data Availability | Value (US$) |
| Segments Covered | Type, Carrier Type, Water Depth, Hull Type and Region |
| Regions Covered | North America, Europe, Asia-Pacific, South America and Middle East & Africa |
| Fastest Growing Region | Asia-Pacific |
| Largest Region | Asia-Pacific |
| Report Insights Covered | Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and Acquisitions, New Equipment Type Launches, Growth Strategies, Revenue Analysis, Porter’s Analysis, Pricing Analysis, Regulatory Analysis, Supply-Chain Analysis and Other key Insights. |
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Market Dynamics
Rising Demand for Oil and Gas
With increased industrialization in Asia-Pacific and continued economic growth in developed regions such as North America and Europe, the global demand for oil and gas has increased considerably in recent years. The International Energy Agency (IEA) predicts that the global market will witness a year-on-year growth of about 2.2 million bpd in 2023, translating to an average increase of 102 million bpd over 2022.
With production stagnating at existing onshore oil and gas fields, energy companies are moving to exploit various offshore oil and gas reserves, particularly in South America, the Middle East and Africa. FPSOs are deployed to the offshore site to facilitate the production and processing of oil and gas. FPSOs have the infrastructure to process, store and offload oil and natural gas to tankers without requiring specialized onshore infrastructure.
Increase in Offshore Gas Processing and Liquefaction
Rising global demand for natural gas has led to expansion in the production output of offshore gas fields. FPSOs offer a flexible and efficient solution for offshore gas processing and liquefaction. Many offshore gas reserves are in remote and challenging environments, making traditional onshore processing and liquefaction impractical. FPSOs can be deployed to these remote areas, enabling the development and production of gas reserves that would otherwise be stranded.
FPSOs enable the economic development of marginal gas fields. The fields, which may have smaller reserves or lower production rates, may not justify the investment in fixed processing and liquefaction infrastructure. FPSOs offer a cost-effective solution by integrating the necessary processing and liquefaction capabilities on a floating platform, making the development of marginal fields economically viable.
Competition from Other Production Systems
Although FPSOs are versatile in production and have less associated operational costs, the usage of fixed platforms might be more suitable for offshore oil and gas production. Offshore fixed media are widely used for commercializing large reserves and are a worthwhile long-term investment. Modern custom-built FPSOs cost more than USD 850 million, whereas traditional offshore oil platforms cost up to USD 650 million, thus making them more economical.
Technological advancements in alternative production systems can impact the competitiveness of FPSOs. For example, advances in subsea technology, such as longer tie-back distances and subsea processing capabilities, have made subsea tie-backs more attractive for specific projects. Similarly, improvements in fixed platform designs and construction techniques have enhanced their feasibility for operation in challenging environments.
Market Segment Analysis
The Global FPSO Market is segmented based on type, carrier type, water depth, hull type and region.
Growing Offshore Exploration is Creating Increasing Demand for Newly Built FPSO ships
Newly built FPSO ships account for nearly two-thirds share of the global market. Energy companies order FPSOs with customized configurations, thus making them particularly suited for the unique geographical conditions of each location. Furthermore, the nature of offshore exploration, such as oil or natural gas, also plays a crucial role in building new ships.
Although re-deployment seems like an economical option, it is rendered unviable due to various reasons. Since the FPSOs are built with bespoke assets for specific field requirements, they can have difficulty in getting deployed to a new area. Furthermore, the production capacity of used FPSOs is severely degraded due to years of operations and may require extensive refurbishments before deployment.
Market Geographical Share
Increasing Energy Exports Fuel Market Growth in the Middle East and Africa
The Middle East and Africa FPSO market accounts for nearly a quarter of the global market share. Although the Middle East has been a major energy exporter for decades, commercial production of new offshore reserves from Africa has led to a significant increase in demand for FPSOs. The prevailing geopolitical situation has led Europe to seek alternative energy supplies from newly emerging exporters in Africa.
In November 2022, the first LNG cargo was exported to Europe from the Coral Sur floating LNG production facility off the coast of Mozambique. In January 2023, the multinational energy company BP plc announced that its new FPSO was being shipped on-site to commence production at the Greater Tortue Ahmeyim oilfield off the coast of Senegal in West Africa.
Market Key Players
The major global players include BP Plc, Aker Solutions AS, Shell Global, Bluewater Energy Services B.V., Bumi Armada Berhad, BW Offshore, Chevron, ExxonMobil Corporation, MODEC, Inc. and Petrobras.
COVID-19 Impact on Market
COVID Impact
The COVID-19 pandemic led to a significant collapse in global oil prices, with prices even turning negative for a brief period in April 2020, during the initial days of the pandemic. Low oil prices impacted the global oil and gas industry and led to a near collapse in demand for new FPSOs. Furthermore, labor shortages and pandemic restrictions severely affected the production of new FPSOs.
The economic uncertainty caused by the pandemic made it challenging to secure project financing for FPSOs. Banks and financial institutions became more cautious about lending to oil and gas projects, resulting in tighter credit conditions and increased financing costs. The difficulty in accessing adequate financing further impacted the development and implementation of FPSO projects.
However, in the post-pandemic period, global energy demand recovered quickly due to a strong rebound in the manufacturing and international tourism industries.
Russia- Ukraine War Impact
The ongoing Russia-Ukraine conflict destabilized global energy markets, causing significant energy-driven inflation in Europe as Russian supplies were cut drastically. The European Union (EU) and the U.S. imposed sanctions on Russia, disrupting the delivery of FPSOs to the Russian oil and gas industry, and significantly disrupting plans for potential Arctic offshore oil and gas exploration.
Europe also started reorienting its energy supplies from Russian natural gas to liquified natural gas (LNG) from the U.S. and the Middle East. Europe also deployed FPSOs to temporarily take deliveries of LNG cargo while permanent LNG storage infrastructure was being built in various European countries.
By Type
- Oil
- LPG
- LNG
- Others
By Carrier Type
- Converted Ship
- New Built Ship
- Redeployed
By Water Depth
- Shallow Water
- Deep & Ultra-deep Water
By Hull Type
- Single Hull
- Double Hull
By Region
- North America
- The U.S.
- Canada
- Mexico
- Europe
- Germany
- The UK
- France
- Italy
- Spain
- Rest of Europe
- South America
- Brazil
- Argentina
- Rest of South America
- Asia-Pacific
- China
- India
- Japan
- Australia
- Rest of Asia-Pacific
- Middle East and Africa
Key Developments
- In June 2023, Petrofac, a U.S.-based oil and gas contractor, announced that it had received an extension for the service of FPF-003 FPSO off the coast of Thailand. The FPSO has a production capacity of 20,000 bpd.
- On June 06, 2022, Petrobras, Brazil’s state-owned oil and gas company, announced that it had commenced FPSO production at the Buzios offshore field. The FPSO Almirante Barroso is expected to produce 150,000 barrels of oil daily.
- In June 2023, MAN Energy Solutions SE, a German energy engineering company, announced that it had won a contract to supply compressor trains for use on a new FPSO destined for use in an offshore oilfield off the coast of Angola.
Why Purchase the Report?
- To visualize the Global FPSO Market segmentation based on type, carrier type, water depth, hull type and region, and understand key commercial assets and players.
- Identify commercial opportunities by analyzing trends and co-development.
- Excel data sheet with numerous data points of FPSO market-level with all segments.
- PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
- Type mapping available as Excel consisting of key products of all the major players.
The Global FPSO Market Report Would Provide Approximately 64 Tables, 66 Figures And 215 Pages.
Target Audience 2024
- Oil and Gas Companies
- Energy Trading Companies
- Marine Engineering Companies
- Industry Investors/Investment Bankers
- Research Professionals
