The FPSO market was valued at US$ 11,911.53 million in 2021 and is expected to reach US$ 21,833.07 million by 2028; it is estimated to grow at a CAGR of 8.0% from 2021 to 2028.
The increasing demand for reliable power due to industrial growth and advancement has created a need for alternative oil sources, which is benefiting the global FPSO market. The market is growing due to expanding offshore operations in deep and ultra-deep seas, as well as increased investments in the sector. Moreover, the expected rise in oil and gas consumption is likely to encourage the development of oil and gas fields, fueling market growth. Marginal oil reserves in remote offshore areas are also expected to contribute to market growth. For instance, the discovery of an oil field with an estimated reserve of 170 million barrels of oil on Australia's Northwestern Shelf in 2018.
The International Energy Agency (IEA) forecasts that Brazil's offshore oil and gas production activities will require annual capital investment of US$ 60 billion by 2040, which will further drive the market growth. FPSO units' ability to operate without the support of a fixed structure, as well as their flexibility to be redeployed to other oil fields and their resilience to adverse weather conditions, make them attractive to the industry. The depletion of onshore oil deposits and the high cost of infrastructure development are also contributing to the deployment of FPSO units as an alternative, which is reducing the cost of oil and gas procurement and driving the FPSO market's growth.
The FPSO market is also being driven by the increasing strategic initiatives taken by major players in the industry. For example, in May 2019, Bumi Armada was awarded a nine-year contract by the Oil and Natural Gas Corporation to supply and operate FPSO vessels for the west coast of Kakinada through its joint venture business Shapoorji Pallonji Bumi Armada Godavari. Furthermore, there has been a significant increase in offshore oil & gas exploration and production, leading to the discovery of new oil & gas reserves around the world. According to Rystad Energy, 12.2 billion barrels of oil equivalent were discovered in 2019, with offshore regions leading the way with 26 recorded discoveries of over 100 barrels of oil equivalent. In August 2020, Saudi Aramco discovered two new oil & gas fields in the northern parts of Saudi Arabia, and in September 2020, Equinor announced the discovery of new oil & gas fields at the Swisher prospect, as well as two oil fields in the Flemish Pass basin offshore Newfoundland. These developments are expected to fuel further growth in the FPSO market.
The COVID-19 pandemic had a detrimental impact on the demand for oil & gas, resulting in a significant decline in the FPSO market during the early months of 2020. The European region, in particular, was adversely affected due to the disruption in the oil & gas sector caused by the lockdown. Nevertheless, with the reopening of industries and a subsequent increase in energy demand, oil & gas activities are expected to resume, thereby boosting the FPSO market's growth. For example, the Johan Castberg field development project in Norway, which includes three oil discoveries - Skrugard, Havis, and Drive, has resumed in 2022 and is expected to continue until 2046. As a result, the FPSO market is expected to recover gradually and gain momentum during the later forecast period. Additionally, as economic activities resume, a positive impact is being created on the market, which is projected to overcome the lack of demand in the coming months and subsequent years. In the post-COVID era, the resumption of oil extraction projects is a significant driver of the FPSO market.
The FPSO market is segmented based on water depth, hull, mooring, and construction. Based on water depth, the market is segmented into shallow water, deep water, and ultra-deep water. In terms of FPSO market share based on water depth, shallow water segment led the market in 2021. Based on hull, the market is segmented into single hull and double hull. In 2021, the double hull segment led the market and accounted for a larger market share. Based on mooring, the FPSO market is segmented into spread mooring and disconnectable mooring. In 2021, the disconnectable mooring segment led the market and accounted for a larger market share. Based on construction, the FPSO market is segmented newly built and converted. In 2021, the newly built segment led the market and held a larger market share. Geographically, the FPSO market is broadly segmented into North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM). In terms of FPSO market share geographically, SAM dominated the market in 2021.
MODEC, PETROBRAS, BUMI ARMADA, SBM OFFSHORE, CHINA NATIONAL OFFSHORE OIL, ROYAL DUTCH SHELL, EQUINOR ASA, TOTAL, EXXONMOBIL, and BW OFFSHORE are among the key players operating in the global FPSO market.
The global FPSO market size has been determined through a comprehensive research approach that involves both primary and secondary sources. In the initial stage, extensive secondary research was conducted using internal and external sources to gather qualitative and quantitative data related to the FPSO market. This helped in obtaining an overview and forecast for the market across all segments. Subsequently, multiple primary interviews were conducted with industry experts such as VPs, business development managers, and market intelligence managers, as well as external consultants including valuation experts, research analysts, and key opinion leaders who specialize in the FPSO market. The primary research process was carried out to validate the data and gain additional analytical insights into the topic.