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www.marinelink.com 63Since the beginning of this year, orders have been placed for 17 ß oating production systems. The combined value of the fabri-cation contracts exceeds $16 billion. By year end there will likely be another Þ ve to eight contracts awarded and the over- all contract value for the year will exceed $20 billion. Stated in terms of conventional ships, fabrication of ß oating production sys- tems in 2013 will equate to orders for 220 VLCCs, 360 Suezmax tankers or 800 Panamax bulk carriers. In other words, it is a big market. Yet relatively few shipbuilders are active in this sector. This article highlights the opportunities that non-players are missing and sug-gests some options for positioning in this market space.Floating production systems inven-tory ? 269 ß oating production units are now in service or available. FPSOs ac-count for 61% of the existing systems. The balance is comprised of production semis, tension leg platforms, production spars, production barges and ß oating re- gasiÞ cation/storage units. Another 93 ß oating storage/of ß oading units (without production capability) are in service. The number of production ß oaters has been growing steadily ? there are 22% more units than Þ ve years ago, almost 80% more than 10 years back. Includ-ing units that have been scrapped, almost 300 ß oating production units have been delivered since the mid-1970s when ß oating production began. Current order backlog ? 72 production ß oaters are now on order, consisting of 40 FPSOs, six production semis, Þ ve TLPs, four spars, one barge, four FLNGs and 12 FSRUs. Delivery of the equip-ment will grow the production ß oater in- ventory by 27%. In the backlog are 46 units utilizing pur- pose-built hulls, 26 units based on con-verted tanker hulls and 1 unit being mod-iÞ ed from an existing production semi Of the production ß oaters being built, 41 are owned by Þ eld operators, 31 are be- ing supplied by leasing contractors. Brazil continues to dominate orders for production ß oaters ? 23 units are being built for use offshore Brazil, 32% of the order backlog. Future demand ? Floating production is still in the exponential phase of growth and underlying industry demand drivers are very strong. Key signs ? oil prices, planned projects, drilling activity ? point to accelerating requirements for new ß oating production systems over the next Þ ve to ten years. Spot oil prices have hovered in an $80 to $120 per barrel range over the past year and futures pricing is indicating $80 to $100 per barrel through the decade. This pricing environment supports invest-ment in all but the most marginal deep- water developments. At these prices, a ß oating production system producing an average of 70,000 b/d over the next Þ ve years will generate $10 to 12 billion in revenue. After royalties and operating expenses, a $2 to 3 billion investment in the production ß oater and subsea Þ eld development looks pretty attractive.The portfolio of new ß oating production projects under study or planned world-wide keeps increasing. As of July there were 241 new ß oater projects in the bid- ding, design or planning stage. These are declared discoveries that likely require a production ß oater for development. A year ago 233 projects were in the plan-ning, design or bidding stage. Five years ago, the Þ gure was 141 projects. Ten years back, 94 projects. The number and utilization of deep-water drill rigs points to accelerating demand for new ß oating production sys- tems. Deepwater drill contractors are now operating at full utilization and de-mand for deepwater drill equipment has driven day rates for drillships and deep-water drill rigs to a record level. More than 90 additional drillships/semis are scheduled for delivery over next few years. These new drill units will increase deepwater drill capability by 30%, removing a bottleneck that has con-strained exploration and development in deepwater. More drill rigs enable more Opportunities for Shipbuilders and Repair Yards In a Huge & Growing Market By Jim McCaulInternational Maritime Associates, Inc.MR #9 (58-65).indd 63MR #9 (58-65).indd 638/30/2013 10:06:23 AM8/30/2013 10:06:23 AM
