Near-Term Prospects for The Deepwater Floating Production and Storage Sector are Excellent
Near-term prospects for the deepwater sector are excellent.?That’s the bottom line in WER’s just completed analysis of the floating production market.?
As detailed in WER’s August report, oil demand growth is expected to continue at a strong pace, OPEC+ appears to be able to successfully keep oil supply under control and crude inventory has been falling -- setting the scene for crude prices to remain in the $60 to $70+ range over the near-term.?
Recent deepwater contracting activity has been very strong. Two large production floaters were ordered over the past month – a production semi for the GOM and an FPSO for Brazil -- the 8th?and 9th?production floater ordered thus far this year.?Quite a change from 2020 where only four FPSOs were ordered during the entire year.
Looking forward, the number?of production floater contracts in the near-term queue remains at record high.??As detailed in our report,?25 floater contracts are lined up for award over the next 18 months. ?They include 21 FPSO and 4 production semi contracts. ?These are all solid prospects with high likelihood to move forward to EPC contract by early-2023, given the expected strong market conditions.?The only barrier could be the ability of the supply chain to digest this record volume of orders over the next 18 months.??
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