FPSO Market Research Report and Outlook by 2028

In 2021, the FPSO market was valued at approximately US$ 11,911.53 million and is projected to grow to around US$ 21,833.07 million by 2028, reflecting a compound annual growth rate (CAGR) of 8.0% during the period from 2021 to 2028.

The surge in demand for dependable energy sources, driven by industrial expansion and technological advancements, has led to an increased interest in alternative oil sources, thereby benefiting the global FPSO market. This growth is largely attributed to the expansion of offshore operations in both deep and ultra-deep waters, alongside heightened investments in the sector. Additionally, the anticipated rise in oil and gas consumption is expected to stimulate the development of new oil and gas fields, further propelling market growth. The exploration of marginal oil reserves in remote offshore locations is also anticipated to play a significant role in this growth. A notable example is the discovery of an oil field with an estimated reserve of 170 million barrels on Australia?s Northwestern Shelf in 2018.

The International Energy Agency (IEA) projects that Brazil's offshore oil and gas production will necessitate an annual capital investment of US$ 60 billion by 2040, which will further enhance market growth. The unique capabilities of FPSO units, which can operate independently of fixed structures, their flexibility for redeployment to various oil fields, and their robustness against harsh weather conditions, make them particularly appealing to the industry. The depletion of onshore oil reserves and the high costs associated with infrastructure development are also driving the adoption of FPSO units, which in turn reduces the expenses related to oil and gas procurement and stimulates the growth of the FPSO market.

Moreover, strategic initiatives by major industry players are propelling the FPSO market forward. For instance, in May 2019, Bumi Armada secured a nine-year contract from the Oil and Natural Gas Corporation to provide and manage FPSO vessels for the west coast of Kakinada through its joint venture, Shapoorji Pallonji Bumi Armada Godavari. There has also been a notable increase in offshore oil and gas exploration and production, leading to the identification of new reserves globally. According to Rystad Energy, 12.2 billion barrels of oil equivalent were discovered in 2019, with offshore regions accounting for 26 discoveries of over 100 barrels of oil equivalent. Significant discoveries were made by Saudi Aramco in August 2020 in northern Saudi Arabia, and in September 2020, Equinor announced new oil and gas fields at the Swisher prospect and two oil fields in the Flemish Pass basin off Newfoundland. These developments are expected to further stimulate growth in the FPSO market.

The COVID-19 pandemic initially had a negative impact on the demand for oil and gas, leading to a substantial decline in the FPSO market during the early months of 2020. The European region was particularly affected due to disruptions in the oil and gas sector caused by lockdown measures. However, as industries began to reopen and energy demand increased, oil and gas activities are anticipated to recover, thereby enhancing the growth of the FPSO market. For example, the Johan Castberg field development project in Norway, which encompasses three oil discoveries?Skrugard, Havis, and Drive?resumed in 2022 and is expected to continue until 2046. Consequently, the FPSO market is projected to gradually recover and gain momentum in the latter part of the forecast period. As economic activities resume, a positive influence on the market is expected, which should help overcome the previous demand shortfall in the coming months and years. The resumption of oil extraction projects in the post-COVID landscape is a crucial driver for the FPSO market.

The FPSO market is categorized based on water depth, hull type, mooring system, and construction method. In terms of water depth, the market is divided into shallow water, deep water, and ultra-deep water segments. The shallow water segment led the market in 2021. Regarding hull types, the market is segmented into single hull and double hull, with the double hull segment holding a larger market share in 2021. The mooring segment is classified into spread mooring and disconnectable mooring, with the disconnectable mooring segment leading the market in 2021. In terms of construction, the market is divided into newly built and converted FPSOs, with the newly built segment dominating in 2021. Geographically, the FPSO market is segmented into North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM), with SAM leading the market in 2021.

Key players in the global FPSO market include MODEC, PETROBRAS, BUMI ARMADA, SBM OFFSHORE, CHINA NATIONAL OFFSHORE OIL, ROYAL DUTCH SHELL, EQUINOR ASA, TOTAL, EXXONMOBIL, and BW OFFSHORE.

The global FPSO market size has been established through a thorough research methodology that incorporates both primary and secondary sources. Initially, extensive secondary research was conducted using both internal and external sources to collect qualitative and quantitative data related to the FPSO market. This process provided a comprehensive overview and forecast for the market across all segments. Following this, numerous primary interviews were conducted with industry experts, including VPs, business development managers, and market intelligence managers, as well as external consultants such as valuation experts, research analysts, and key opinion leaders specializing in the FPSO market. This primary research was essential for validating the data and gaining further analytical insights into the subject.