2018 Offshore Technology Yearbook

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38 | December 2017 | Awards, Activations Engender Optimism 2018 OFFSHORE TECHNOLOGY YEARBOOK | FIXED AND FLOATING SYSTEMS Contract awards and resumed construction indicate the formerly stagnant fixed and floating systems market is beginning a long-awaited revival. By Judy Murray, Contributing Editor I ncreased activity in the fixed and floating systems sector suggests things are looking up–at least in relative terms. After what was a particularly inactive 2016, companies have made the move to advance projects and resume construction. A sign of the times The floating production system (FPS) market fared poorly in 2016. The market was shaky in 2015, and then the oil price dropped precipitously at the beginning of the year, hitting its lowest point since the price began to decline in mid-2014. That som- ber note set the tone for the industry, and conserva- tism was the watchword for the ensuing year. Fortunately, prices did not remain at this nadir for long, but the slow climb back up never took oil to anything remotely resembling its earlier price point. The most recent apex was reached at the beginning of 2017, when the oil price hit $55 for the first time in 18 months and remained above $50 for the first few months of the year. While the price since that time could not be characterized as par- ticularly stable, it has evened out at a level that has given the industry sufficient confidence to begin resurrecting development plans that had been put on indefinite hold. In a news release published by Singa- pore-based Energy Maritime Associates (EMA) in early August 2017, Managing Director David Boggs expressed optimism based on EMA data for the floater sector. "The recovery that began in Q4 2016 has continued," Boggs said, cautioning that while one floating production unit per month is well below the historical average of 1.5 orders/ month, the consistent emergence of orders paints a slightly more positive picture. "Confidence appears to be retun- ing," Boggs said, pointing to the sanctioning of a number of proj- ects and indicators that several companies had begun tendering for FPSOs. Even though oil prices are expected to remain low, he said, there are viable offshore projects that will move ahead as a result of lower supply chain costs and revised development plans. 0 5 10 15 20 25 30 35 40 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 FSRU NOTE: includes construction, redeployments and units in demand FPS Deployments 2010 to 2021 Number of FPS FLNG Other TLP Spar Semi FSO FPSO After a spike in deployments this year, the forecast indi- cates a tapering off through 2020. (Source: IHS Markit)

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