$110bn going offshore
- 2009-10-05
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Perter Clarkson - Hits: 894
Around $110bn of investment could be put into floating , the classification society Lloyd's Register (LR) forecast. With crude oil trading at $70 per barrel, LR expects investment in exploration and production will soon pick up again.
As many of the newer oil and gas fields are located in deepwater locations, LR global manager for the sector Ron Edgar said around 50% of this demand would be supplied by floating production units, either conversions or newbuildings.
The offshore conversion market is dominated by Singapore yards but other yards are targeting the sector with newbuildings.
Mr Edgar said the South Korean yards traditionally view offshore work as a "necessary evil", but the sharp decline in newbuilding orders for ships was prompting yards to expand into the offshore arena. Chinese yards are also targeting the same sector.
LR forecasts $110bn a year will be spent on new floating offshore structures to 2013. Mr Edgar said around 70% of these units would be built at shipyards in Asia.
Around 50% of this investment is expected to come in the floating production storage and offloading units, including floating liquefied natural gas concept, which is under development.
In recent years, LR has been involved in around one or two FPSO projects a year and expects this number to continue.
Mr Edgar expected Singapore yards to maintain their lead in the offshore conversion sector. However, South Korean yards are well placed to win orders for floating LNG vessels.
The classification society has forecast capital expenditure of $23bn-$25bn in the market for floating LNG through to 2013, with this work centered on three to four South Korean shipbuilders.
Source: Asiasis
