Floating Production Storage and Offloading (FPSO) Market: Analysis By Type , By Propulsion, By Hull Type, By Usage, By Region Size and Trends - Forecast up to 2029

Floating production storage and offloading (FPSO) refers to a floating vessel located near an offshore oil and gas field, where oil and gas is processed and stored until it can be transferred to a tanker for transporting and additional refining. Global floating production storage and offloading market is associated with design, construction, operation, and leasing of FPSO units, for the production, processing, storage, and offloading of oil & gas. The global FPSO market value stood at US$23.04 billion in 2023, and is expected to reach US$33.32 billion by 2029.

Market Segmentation Analysis:

By Type: The report provides the bifurcation of the global FPSO market into two segments on the basis of type, namely, converted and new built. Converted FPSO are more economically viable to build as they repurpose existing vessels. Converted is the largest segment of global FPSO market owing to, growing energy demand, rising preference for lease & charter models, increasing availability of decommissioned or underutilized oil tankers, rising demand in mature offshore fields, increasing emphasis on sustainability, global presence of shipyards with expertise in FPSO conversion, and low capital expenditure & short procurement cycles associated with converted FPSOs. New built is the fastest growing segment of global FPSO market owing to growing global push for energy security, reduced maintenance & downtime, increasing demand in large-scale & long term projects, rising demand for customization among operators, greater processing & storage capacities associated with new built FPSOs, increased preference of new built FPSOs for harsh and ultra-deepwater fields, ongoing integration of enhanced mooring and dynamic positioning systems, and increased capital investments in offshore oil and gas exploration, particularly in regions like Brazil, West Africa, and the Gulf of Mexico.

By Propulsion: The report provides the bifurcation of the global FPSO market into two segments on the basis of propulsion, namely, self propelled, and towed. Self-propelled FPSO segment witness high preference, as it can move without any external propulsion and the transportation cost is lower than the towed FPSOs. Also, self-propelled vessels have the advantage of being able to navigate on their own, which gives them increased maneuverability and precise positioning capabilities. Self propelled is the largest and fastest growing segment of global FPSO market owing to increased preference for long-term asset flexibility, growing demand for FPSO vessels in remote and ultra-deepwater oil & gas fields, increased focus on offshore field redevelopment, reduced cost efficiency of self propelled FPSOs in long-term operations, rapid expansion of offshore natural gas projects, minimal dependence of self propelled FPSOs on shore infrastructure, ongoing innovations in FPSO propulsion systems, and presence of favorable financing options for mobility-oriented assets.

By Hull Type: The report provides the bifurcation of the global FPSO market into two segments on the basis of hull type, namely, single hull, and double hull. Single hull is the largest and fastest growing segment of global FPSO market owing to increasing demand in shallow water and nearshore oil fields, growing trend of refurbishing and upgrading existing single hull FPSOs, rising energy demand, positively expanding oil and gas industry, presence of long-lasting operational history of single hull FPSOs in oil & gas supply chains, increased demand in economically viable offshore projects, and lower initial investment and operational costs associated with single hull FPSOs. The global double hull FPSO market is expected to positively grow in the forecasted period owing to increased emphasis on enhanced safety and environmental protection, rising demand in deepwater and harsh environment operations, increasing oil prices, growing demand in floating LNG and gas export solutions, increasing investment in sustainable & long-term oil production, growing preference for modular FPSO designs, and increasing strategic partnerships and joint ventures between oil and gas companies.

By Usage: The report provides the bifurcation of the global FPSO market into three segments on the basis of usage, namely, shallow water, deep water, and ultra deep water. Shallow water is the largest and fastest growing segment of global FPSO market as a result of abundance of shallow water reserves, growing offshore activities in emerging markets, increasing focus of companies on producing oil from continental shelves & continental slopes, high demand for cost-effective & flexible offshore solutions in mature fields, increased discovery of oil & gas reserves in shallow water areas, short development & production timeline for shallow water FPSOs, and rising demand for oil and gas in coastal regions. Deepwater FPSO market is expected to rapidly grow in the forecasted period owing to increasing energy demand, positive growth in offshore drilling activities to secure long-term hydrocarbon supplies, increased investment in exploration & development of deepwater resources by major oil companies, rising crude oil prices, and increasing innovations in subsea production systems, risers, & mooring technologies.

By Region: The report provides insight into the global FPSO market based on regions namely, North America, Europe, Asia Pacific, and rest of the world. North America is the largest region of global FPSO market as a result of rising demand for offshore oil and gas production, increased investment in developing energy infrastructure, high production targets from the regional agencies, growing industrialization of the deep sea, high capital investment by oil companies, increasing focus on decommissioning of aging infrastructure, growing emphasis on energy independence, high access to skilled personnel and cutting-edge technology providers, and presence of mature oil & gas reserves, particularly in the Gulf of Mexico. The Gulf of Mexico has favorable geology and well-established infrastructure conducive to FPSO operations. Also, North America is home to a number of premier oil and gas corporations including Emerson Electric Co., ExxonMobil, Chevron Corporation, etc., with substantial offshore operations experience and a proven track record of successfully deploying FPSOs, positively contributing to market growth.

Asia Pacific is the fastest growing region of global FPSO market as a result of rapidly rising energy demand among the developing economies, growing emphasis on renewable energy & greenfield developments, increasing focus on developing smaller and marginal offshore fields, growing LNG and natural gas demand, presence of favorable geopolitical climate for offshore projects, strong regional demand for crude oil exports, and presence of large untapped offshore oil and gas potential, particularly in Malaysia, Indonesia, and Australia. On the basis of region, Asia pacific FPSO market is divided into six segments, namely, China, Japan, South Korea, India, Indonesia, and rest of Asia Pacific, where China FPSO market is the largest and fastest growing region of global FPSO market.

Market Dynamics:

Growth Drivers: The global FPSO market has been rapidly growing over the past few years, due to factors such as increasing offshore oil and gas exploration and production activities, rising natural gas production, expanding global energy demand and consumption, increasing emphasis on cost efficiency, growing focus on marginal and stranded fields, etc. With the depletion of resources from easily accessible onshore facilities, oil & gas companies are turning to marginal fields located in deeper waters. So, as onshore and shallow-water reserves become depleted, there is a positive shift towards deeper waters and more remote offshore locations, where FPSOs offer a practical solution for production & storage. In addition, the global shift towards cleaner energy sources has increased the focus on natural gas as a bridge fuel in the energy transition. FPSOs support this transition by facilitating the exploitation of offshore natural gas fields with minimal environmental impact. FPSOs are equipped with facilities to extract natural gas from subsea wells. In addition, some FPSOs are specifically designed as Floating Liquefied Natural Gas (FLNG) units. These systems convert natural gas into LNG by cooling it to extremely low temperatures, reducing its volume for easier transport.

Challenges: However, the global FPSO market growth would be negatively impacted by various challenges such as, fluctuating oil prices, high capital investment, etc. When oil prices are high, the profitability of FPSO projects increases, encouraging companies to invest in new projects and expand existing operations. Conversely, during periods of low or volatile oil prices, many FPSO projects may be suspended or delayed due to reduced financial viability. This uncertainty can lead to a cautious approach in project development, with stakeholders focusing on cost-reduction strategies and phased development approaches to mitigate risks associated with low oil prices. Also, oil companies tend to prioritize projects with quicker returns, and FPSO units typically serve more complex and expensive offshore oil production needs, which are less attractive when the price of oil is low.

Trends: The global FPSO market is projected to grow at a fast pace during the forecasted period, owing to, increasing focus on redeployment of existing FPSOs, rising emphasis on emissions reduction & environmental stewardship, ongoing technological advancements, positive shift towards modular designs, ongoing collaborative efforts & long term contracts among companies, etc. Redeploying existing FPSOs is significantly more cost-effective than building new units from scratch. It eliminates the need for costly fabrication processes, and allows oil companies to save on capital expenditure by refurbishing and relocating an FPSO to a new site, making it a more viable choice in the face of budget constraints or volatile oil prices. Also, redeployment of FPSOs requires less time compared to designing, building, and commissioning new units. This faster turnaround has allowed oil companies to quickly capitalize on new opportunities in underdeveloped or newly discovered fields.

Impact Analysis of COVID-19 and Way Forward:

COVID-19 brought in many changes in the world in terms of reduced productivity, loss of life, business closures, closing down of factories and organizations, and shift to an online mode of work. The growth of global FPSO market was negatively impacted during the period 2019-2020. Lockdown policies imposed by the government to prevent the spread of the virus forced FPSO manufacturing and oil & gas producing industries to either shut down or run low on production capacity, resulting in temporary shutdowns of shipyards and manufacturing facilities where FPSOs are fabricated, as well as lower production and demand of FPSO units during the period, 2019-2020. Also, global lockdowns was associated with reduced demand for transportation & industrial energy, leading to a sharp decline in oil & gas consumption during the period. This lead to oil companies prioritized cutting costs over launching new exploration or production projects. FPSO units, primarily used for deepwater and ultra-deepwater projects, became less of a priority as companies focused on maintaining existing production.

Competitive Landscape:

The global FPSO market is moderately consolidated, with majority of regional and domestic players catering to the global demand.

The key players of the market are:

• ABB Group
• Bumi Armada Berhad (BAB)
• MODEC, Inc.
• SBM Offshore
• BW Offshore
• Emerson Electric Co.
• Teekay Corporation Ltd.
• Yinson Holdings Berhad
• SAIPEM SpA
• Offshore Oil Engineering Corp CNOOC Ltd.
• Aker Solutions
• Bluewater Energy Services B.V.

The market exhibits high concentration, with a few key players dominating the majority of market share because of their strong brand presence and extensive distribution networks. Key players, alongside other participants, actively engage in strategic initiatives like mergers, acquisitions, and collaborations to expand their global reach and enhance their technological capabilities. For instance, on May 02, 2023, SBM Offshore announced that the company signed a 10-year Operations and Maintenance Enabling Agreement with Esso Exploration & Production Guyana Ltd for the Operations and Maintenance of FPSOs Liza Destiny, Liza Unity, Prosperity and ONE GUYANA. This framework agreement establishes the new terms related to the operations of the Guyana FPSO fleet for a period of 10 years up to 2033. Similarly, on September 15, 2023, SBM Offshore and Mitsubishi Heavy Industries Ltd. announced the signing of a Partnership Agreement that will offer a CO2 capture solution for floating production storage and offloading vessels (FPSO) as they are producing oil and gas from offshore reservoirs. The agreement follows a successful engineering and design study between the companies demonstrating the technical feasibility and commercial readiness of CO2 capture technology offshore.