More newbuilding contracts for floating production storage and offloading vessel (FPSO) are expected in 2021 as rising oil prices stimulate more offshore construction, says Norwegian energy research company Rystad Energy.
More FPSOs were contracted in the second quarter of 2021 than during the whole of 2020. Rystad Energy expects FPSO awards to reach a total of ten units in 2021 against only three in 2020. Rystad expects another four FPSO orders in 2022, which will create a very healthy project line-up for equipment suppliers, effectively doubling their order pipeline. Four FPSOs were awarded in the second quarter and Rystad believes another four will be awarded before the end of the year.
The four FPSO contracts expected to be awarded before the end of this year include the Mero 4 and Parque das Baleias in Brazil, Limbayong in Malaysia and Liuhua 11-1 in China. Rystad said the Brazilian oil giant Petrobras is currently evaluating bids for the two Brazilian FPSOs, Mero 4 and Parque das Baleias. Petrobras only received bids from one supplier for each of the FPSOs. For the larger unit, Mero 4, SBM Offshore was the sole bidder, while Yinson was the only player to bid for the smaller Parque das Baleias FPSO. The muted interest comes as the FPSO supply chain is nearing full capacity with several supplier unable to take on new projects.
In Malaysia, Rystad said, Petronas is evaluating bids for the Limbayong FPSO with a contract award expected to be handed out before the end of the year. Contractors involved in the bidding process are Yinson, MISC, Sabah International Petroleum, and a consortium comprising Bumi Armada, MTC and Shapoorji Pallonji. Also, China’s CNOOC is planning to order a FPSO to redevelop the Liuhua 11-1 and Liuhua 1-4 fields in the South China Sea. The FPSO will be built in China and is likely to involve COOEC, Cosco and CIMC Raffles.
Rystad expects surge in FPSO awards in 2021 and 2022