Deepwater floating production system deployments are expected to total US $68 billion in value and account for more than two-thirds of the total spend on floating systems over the next five years.

According to the latest figures from Douglas-Westwood’s ‘World Floating Production Market Report’, between 2014 and 2018 a total of $99 billion will be spent on floating production systems – an increase of 138% over the preceding five-year period.

But the long-term growth in the sector is underpinned by the continued exploitation of deep waters, marginal fields and fast-track/short term deployments, says the analyst.

FPSOs form the largest segment of the market (80%) both in terms of units installed and forecast capital expenditure (Capex) over the 2014-2018 period, while from a regional perspective Latin America unsurprisingly accounts for 29% of the 139 installations forecast and 38% of the projected Capex.

The recovery of the FPS sector following the 2008/2009 downturn continues steadily, added DW. A total of 54 units were ordered in 2011-2013 compared to 23 units ordered in 2008-2009. There has been little growth in the annual value of installed units over the last four years; however, 2014 is expected to show a significant increase in the value of units deployed, says the analyst.

Utilisation of FPSOs owned by leasing contractors has also improved since the last report, up 3% to 88%.

The company did go on to highlight some ongoing issues within the sector: “The industry is, however, still coming to terms with a number of demand-side and supply-side issues. The failure of Brazilian operator OGX in 2013 and the slowdown in overall upstream expenditure in 2014 will impact the market in the near-term. Likewise the industry’s record in terms of project execution has been poor, with most projects delivered late and significantly over-budget. Some industry players are now suggesting a new approach is required.”

Offshore