Floating Production Storage and Offloading Market Size 2031

Report Description

Floating Production Storage and Offloading Market Outlook 2031

The global floating production storage and offloading market size was valued at USD 23.03 Billion in 2022 and is likely to reach USD 37.35 Billion by 2031, expanding at a CAGR of 6.3% during the forecast period, 2023–2031. The market growth is attributed to the rising focus on safety and environmental compliance and the increasing demand for hydrocarbons.

High demand for hydrocarbons across the globe is expected to drive the floating production storage and offloading (FPSO) market in the coming years. Hydrocarbons are produced in subsea wells and delivered to the FPSO through flowlines & risers and then divided into oil & gas, water, and impurities through the production facilities on the deck of the FPSO.

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Flowlines carry hydrocarbons directly from the seabed well, as flexible or rigid flowlines are available for suitable applications. The objective of the FPSO is to maximize the recovery of hydrocarbon liquids flowing in the gas stream and to remove dissolved gases from the hydrocarbon liquids, thereby increasing liquid production as well as API gravity.

• In September 2023, KBC, a Yokogawa company, launched Petro-SIM 7.4 simulation software for the renewable, oil & gas, and process industries. This digital twin platform meets the diverse needs of the entire hydrocarbon value chain, with its versatility. This includes LNG plants, petrochemical manufacturers, downstream refineries, EPC firms, upstream operators, and consulting companies aiming to reduce Scope 1, 2, and 3 emissions, while optimizing production and energy use with an affordable process simulator.

The market report finds that the COVID-19 pandemic hindered the floating production storage and offloading market, due to the strict lockdown imposed by the governments. Oil & gas companies faced problems, due to the decline in oil prices and the halt in production. In the US, oil prices decreased, and the implementation of lockdown & social distancing hampered the market.

Floating Production Storage and Offloading (FPSO) Market Dynamics

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Major Drivers

Increasing demand for offshore exploration and the production activities of the oil & gas industry is expected to boost the floating production storage and offloading market during the forecast period. High demand for offshore exploration particularly in deepwater and ultra-deepwater exploration and production solutions, which boosts the market.

Offshore exploration and production activities refer to the processes that are involved in extracting, discovering, and producing oil & gas reserves that are located beneath the seabed in offshore areas. FPSOs are commonly used in offshore exploration and production activities for their versatility, production, and cost-effectiveness in exploration, field development, and operational flexibility.

• According to the US Energy Information Administration, the production of crude oil production is expected to average 12.4 million barrels per day in 2023 and 12.8 million barrels per day in 2024 in the US. The US crude oil production averaged at an estimated 11.9 million barrels per day in 2022.

Existing Restraints

High upfront costs are expected to hamper the floating production storage and offloading market in the coming years. The initial investment required to build, deploy, and operate FPSO vessels impacts the market.

These costs include various aspects such as procurement, engineering, installation, construction, and commissioning. Substantial financial commitment is a challenge for operators and requires careful financial planning as well as capital allocation to overcome this hurdle in the FPSO market.

Emerging Opportunities

Increasing research & development activities for the development of new solutions are expected to create lucrative opportunities for the market players during the forecast period. Several companies are developing new innovative technologies and focusing on collaborating and strategic partnerships, which increases the demand for the market.

• In May 2023, SLB collaborated with Sensia LLC, Automation Inc., and Cognite to accelerate the evolution of FPSO facilities of the offshore industry. Digital capabilities developed by the four-company coalition improve the safety, availability, reliability, and efficiency of these critical assets, while lowering the carbon footprint of their offshore operations.

Scope of Floating Production Storage and Offloading Market Report

The market report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Floating Production Storage and Offloading (FPSO) Market Segment Insights

Type Segment Analysis

Based on type, the floating production storage and offloading market is divided into new-build and converted. The converted segment is expected to expand at a significant pace during the projection period, due to its cost-effectiveness.

An FPSO vessel is a conversion of an oil shuttle tanker or a vessel built especially for the application. A vessel that is used only to store oil is referred to as a floating storage and offloading vessel. A shuttle tanker is a ship that transfers oil from offshore oil fields to onshore refineries.

The new-build segment is anticipated to hold a key share of the market in the coming years, owing to the increasing customizable design flexibility that allows progressive modifications. New-build FPSO is designed and constructed from scratch. It has a high initial cost, although it requires limited maintenance.

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Hull Type Segment Analysis

In terms of hull type, the global market is segregated into double hull and single hull. The double hull segment is projected to register a considerable CAGR during the forecast period, owing to the increasing need for heightened security from water ingress and marine pollution.

Double-hull FPSOs have two or double external watertight layers, covering the entire structure of the vessel. It has an additional layer of protection that reduces the likelihood of rupture in the event of collisions or grounding, ensuring the safety of the oil and gas storage. The segment growth is further attributed to the increasing importance of safety and environmental protection by regulatory requirements and industry standards.

Propulsion Segment Analysis

On the basis of propulsion, the floating production storage and offloading market is segmented into towed and self-propelled. The self-propelled segment is expected to register a robust growth rate during the forecast period, due to the transportation cost of FPSOs and a reduction in external propulsion.

Self-propelled solutions and products provide high flexibility and mobility as compared to non-self-propelled counterparts. The segment growth is further attributed to the high need for FPSO vessels in ultra-deepwater and deepwater oil & gas fields.

Usage Segment Analysis

Based on usage, the global market is segmented into deepwater, shallow water, and ultra-deepwater. The shallow water segment is expected to account for a major market share in the coming years, due to the upsurge in the exploration and production activities in shallow water across the globe.

Shallow water FPSOs are designed for depths of smaller than 1,000ft, and they offer a more cost-effective and compact solution as compared to deepwater solutions. The segment growth is further attributed to the increasing advancements in drilling and production technologies as well as the presence of untapped reserves.

Regional Analysis

In terms of region, the global floating production storage and offloading market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the projection period, due to the rising investments to support energy infrastructure in the region. The regional market growth is further attributed to the increasing disposable income and large consumer base.

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