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The Floating Production Storage and Offloading Market size is forecast to increase by USD 8.58 billion, at a CAGR of 6.34% between 2023 and 2028. The market is experiencing accelerated growth driven by rising investments in offshore exploration and production (E&P) activities, fueled by the global increase in energy demand. Additionally, there is a growing need for towed floating production storage and offloading (FPSO) solutions to meet the offshore industry's requirements for efficient hydrocarbon extraction and storage in remote locations. This trend highlights the industry's focus on expanding offshore operations to tap into new reserves and underscores the importance of innovative solutions for offshore energy production.
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Hydrocarbons are transported via various means in the offshore industry, including double hull shuttle tankers and pipelines. These vessels, whether converted or new-build, cater to different applications such as shallow water, deep water, and ultra-deep water operations. The market is segmented based on capacity, with categories like crude oil shuttle tanker. Marine pollution concerns drive the need for modernized fleets, particularly in offshore exploration where small independent and large independent operators, along with major national oil companies (NOCs), deploy hydrocarbon storage solutions on floating structures. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Increasing investments in offshore E&P activities is the key factor driving the market. Investments in offshore activities are increasing globally. Moreover, the depletion of easily accessible onshore locations is encouraging oil and gas E&P companies to look for less explored areas. Furthermore, increasing global crude prices are making the economics of offshore drilling more feasible, thus increasing offshore E&P operations. This is expected to drive the demand for floating production storage and offloading (FPSO).
Furthermore, several countries are planning to start production from oil and gas fields due to increasing oil and gas discovery. Thus, growing E&P activities around the world will lead to an increase in oil and gas production from fields. These production centers will require floating production storage and offloading for extraction from the processing facility to an onshore terminal. Thus, a surge in E&P activities will spur the expansion of the market during the forecast period.
An increase in deepwater and ultra-deepwater projects is the primary trend in the market. Offshore production has become a popular source following the rise in global crude prices. After undertaking shallow-water drilling activities, companies are slowly turning to deepwater and ultra-deepwater drilling activities. Floating production systems can easily adapt to bad sea conditions and are highly functional in deep waters. It is also an effective solution where seabed pipelines are not cost-effective and eliminates the need for long-distance pipelines from the petroleum well to the shore.
Additionally, deepwater projects demand more expenditure and time than shallow water or onshore ventures, despite technological advancements that have made new areas accessible. Furthermore, offshore deepwater and ultra-deepwater drilling projects are on the rise as more companies are taking up drilling activities in deep waters that are extremely challenging, where floating production storage and offloading offer a suitable option. Thus, such factors will drive the market during the forecast period.
Volatility in prices restraining supply is a significant challenge that affects market expansion. Fluctuations in the price negatively impacted the profitability and performance of upstream companies in 2023. The average crude oil price in 2019 was USD 64.4 per barrel, which declined to USD 41.96 per barrel in 2020, and in 2021 the price reached USD 70.68 per barrel. The fluctuating crude oil prices have had a negative impact on the upstream sector. Companies in the this sector abandoned several oil exploration and production projects, such as the N.L. oil project, due to fluctuating oil prices.
Additionally, the volatility in global crude oil prices led to several large-scale E&P activities being put on hold. Thus, the upstream oil and gas companies are adversely affected when crude oil prices fall since the price at which crude oil is sold is determined by the market, but production costs are largely fixed. As a result, fluctuating crude oil prices hinder the demand for floating production storage and offloading due to the reduction in production. Thus, volatility in global crude petroleum prices poses a challenge to market expansion during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The single segment is estimated to witness significant growth during the forecast period. A single system has one shell that houses the production, storage, and offloading facilities. It is typically used in shallow water locations where there is a lesser risk of collision with other vessels or structures. Single hulls are more stable because of the large surface area of the tanks than double hulls. They are commonly used in regions with less stringent environmental regulations because oil spills from single-hull tankers directly into the ocean pose a high threat to the marine environment.
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The single segment was the largest segment and was valued at USD 10.43 billion in 2018. Single hull is highly flexible and can easily be modified and adapted for different production requirements. This system is simple and less expensive to construct and maintain as compared to a double-hull floating production storage and offloading system. Thus, the single segment is expected to witness growth in the market during the forecast period.
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South America is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Several initiatives are also being undertaken to increase investments in the upstream sector in South America. Thus, these government initiatives will increase E&P activities and, subsequently, spur the production of oil and gas in the country. Increasing production of refinery products, crude oil, and natural gas will require additions to the pipeline network to transport the products to various consumers.
Consequently, this is expected to drive the demand for these activities, which is anticipated to drive the growth of the market in the region. Further, several projects are in the construction stage, and many new projects have also been planned in the region. Thus, the increasing investment is anticipated to boost the growth of the market in the region during the forecast period.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The global Floating Production Storage and Offloading (FPSO) market is a crucial component of offshore exploration and production, offering a versatile solution for hydrocarbon storage, processing machinery, and transportation. FPSOs are essentially repurposed large oil tankers that have been converted into floating production facilities, with onboard production and handling capabilities for crude hydrocarbons.
Furthermore, one of the key growth drivers for the FPSO market is the increasing demand for offshore oil and gas exploration and production. The converted segment holds the largest market share, especially in the double hull segment, due to its safety and regulatory compliance. However, high capital investment and stringent contracts pose restraints to market growth.
Moreover, the market offers lucrative opportunities for innovation, particularly in propulsion and application in ultra-deepwater locations. Technological advancements are also driving market growth, particularly in shallow and deepwater segments. The market is segmented by type, application, and region, with a focus on generating solutions for onshore locations. Overall, the FPSO market is expected to continue its growth trajectory, fueled by these opportunities and challenges.
However, this market is driven by the increasing demand for offshore oil & gas exploration and production, particularly in deep- and ultra-deepwater regions. FPSOs, which serve as offshore production facilities, are crucial in such operations, offering storage and processing equipment capabilities. The market segmentation is based on water depth, with ultra-deep water projects becoming more lucrative. Major players in the market include Major National Oil Companies (NOCs), Large Independent operators, and Leased Operators. The FPSO market also involves various types of vessels, including shuttle tankers, large tankers, and repurposed oil large transporters, to support operations in remote locations.
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Market Scope |
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Report Coverage |
Details |
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Page number |
156 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.34% |
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Market growth 2024-2028 |
USD 8.58 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.56 |
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Regional analysis |
South America, Middle East and Africa, APAC, Europe, and North America |
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Performing market contribution |
South America at 39% |
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Key countries |
Angola, Nigeria, China, UK, and Brazil |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
BUMI ARMADA BERHAD, Bluewater Energy Services BV, BP Plc, BW Offshore Ltd., Chevron Corp., China National Offshore Oil Corp., Exxon Mobil Corp., Hyundai Heavy Industries Co. Ltd., Mitsubishi Heavy Industries Ltd., MODEC Inc., Petroleo Brasileiro SA, Saipem S.p.A., SBM Offshore NV, Shell plc, TechnipFMC plc, TotalEnergies SE, Vietnam Oil and Gas Group, Woodside Energy Group Ltd., and Yinson Holdings Berhad |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Product Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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