Floating production systems Market is likely to rise at a CAGR of 17.20% By 2019

Boosted by the increasing oil exploration initiatives and offshore drilling, the global market for floating production systems is likely to rise at a CAGR of 17.20% between 2013 and 2019. The market, which stood at US$12.6 bn in 2012, is projected to present an opportunity worth US$38.7 bn by the end of 2019.

The global market for floating production systems is studied on the basis of the product and its geographical segmentation. Based on the product, the market is categorized into floating storage and offloading (FSO) unit, tension leg platforms (TLP), SPAR, and floating production storage and offloading (FPSO) systems. Based on geography, the market is classified into Asia Pacific, Europe, North America, and the Rest of the World.

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This research study on the worldwide market for floating production systems aims at presenting an all-inclusive market assessment, taking its past as well as current performance into consideration. The key trends and growth prospects of this market have also been studied in this report in order to determine its future status.

Overview of Global Floating Production Systems Market

Thanks to the significant increase in offshore drilling activities, floating production systems have been witnessing remarkable demand across the world since the past few years. The deepwater discoveries in Asia Pacific and the Rest of the World have also fueled the demand for these systems substantially across the world. With the increasing preference of FPSOs for the extraction of crude oil and offshore drilling, the segment is likely to gain prominence in the coming years. The advantages offered by FPSOs, such as the reduction in operational costs to oil companies by simplifying the transportation of crude oil, are also expected to add significantly to their demand over the next few years. TLP and SPAR are also projected to witness strong demand in the near future, thanks to the upcoming offshore drilling projects.

Geographically, African and South American countries, such as South Africa and Brazil, lead the global market for floating production systems market. Over the coming years, analysts expect these countries to remain dominant in terms of revenue.

Europe is also expected to experience a surge in demand for these systems. The increasing number of offshore projects in the U.K. and Norway is anticipated to boost the market for floating production systems in Europe. On the other hand, the rise in the population base and the heightening industrialization will drive the markets in Asia Pacific and North America in the near future.

Although the growth prospects of the global market for floating production systems are bright, the high installation and maintenance costs associated with these systems are likely to hamper the market to some extent.

Companies Mentioned in the Research Report

Malaysia Marine and Heavy Engineering Berhad, Hyundai Heavy Industries Co. Ltd., Mitsubishi Heavy Industries Ltd., Samsung Heavy Industries Co. Ltd., Bumi Armada Berhad, Keppel Offshore & Marine Ltd., SBM Offshore N.V., Technip S.A., Worley Parsons Ltd., and Teekay Corp. are some of the key manufacturers of floating production systems across the world.

Key Segments of Global Floating Production Systems Market

By Product

• FPSO
• TLP
• SPAR
• FSO

Increased Drilling In Sub-sea Sector Expected to Push Demand for Floating Production Systems, says TMR

The floating production system (FPS) market is oligopolistic in nature. The market requires supreme expertise and thus has only a few players. The leading players are focused on research and development activities, enabling them to extract larger quantities of natural gas and crude oil by making use of floating production system technology. The leading players in the market are Mitsubishi Heavy Industries Limited, Worley Parsons Limited, Technip S.A, and Hyundai Heavy Industries Corporation Limited. Competition among the players is expected to rise, suggests a new report by Transparency Market Research.

The lower number of suppliers and the high costs of FPS components are increasing the bargaining power of suppliers. This is expected to change in the course of time as advanced manufacturing technologies will help reduce the production cost of these FPS components. “The bargaining power of suppliers is thus expected to become moderate over the coming years,” states a TMR analyst.

Increasing Demand for Crude Oil Induces Exploration and Production Companies to Drill in Offshore Regions

There has been a huge demand for crude oil in countries such as China, India, and Brazil owing to rapid industrialization. This has propelled the exploration and production (E&P) companies to extensively carry out drilling activities in the offshore regions. Drilling in offshore regions, necessitates for companies to have advanced technologies and strong capital support. This has accelerated the demand for floating production systems, which help the E&P companies to drill the wells in shallow, deep, and even ultra-deep water, with ease.

While currently only 9% of the total crude oil comes from the subsea sector, this is expected to change in the coming years, and by 2020, the subsea sector is expected to account for around 20% of the total crude oil production. This will further increase the demand for FPS and benefit the market.

Problems Relating to Complexity and High Cost Need Attention of Market Players

FPS projects have expanded in terms of complexity. Moreover, it is not uncommon for FPS projects to become billion-dollar projects, as deep water drilling projects are challenging and require large floating production systems. The procurement of large FPS systems needs huge capital, which in turn increases the cost of the project. Further, there are challenges such as inability to deliver FPS on time, or prolonged delays in the sanctioning of the project.

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However, the untapped reserves of crude oil and natural gas will open doors of growth opportunities in the floating productions systems market. The recent discovery of offshore reserves in the French Guiana is one such a growth opportunity, which is expected to fuel the demand for FPS.

Demand for FPSO to Rise owing to Multiple Tasks Performance Ability

According to TMR, floating production storage and offloading (FPSO) was the leading product segment in 2012, accounting for 64.7% of the global FPS market. The FPSO segment is expected to retain its leading position in the coming years. The high demand for FPSO in offshore drilling activities is majorly due to the multiple tasks it can perform such as floating, production, storage, and offloading. High demand for FPSO from major petroleum companies will also drive this segment to its leading position.

In terms of geography, the global floating production systems market is expected to be led by the Rest of the World. It is expected that over 100 new offshore projects will spring up in the Rest of the World, thus driving the demand for FPS.

According to the report, the global market opportunity in FPS will rise from US$12,616 mn in 2012 to US$38,752.7 mn by 2019, expanding at a 17.20% CAGR from 2013 to 2019.

The information is based on the findings of a report published by Transparency Market Research titled “Floating Production Systems Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019.”

The global floating production systems market is segmented into:

End Users

• FPSO
• TLP
• SPAR
• FSO

Region

• North America
• Europe
• Asia Pacific
• Rest of the World (RoW)

Research Report Floating Production Systems Market 2013 - 2019

A new market research report published by Transparency Market Research, titled “Floating Production Systems Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019,” presents a detailed overview of the floating production systems market, its growth drivers and restraints, as well as its segmentation. Analyzing the market for developmental trends of the past, the report also presents a forecast of the market’s state over the years between 2013 and 2019. As per the report, the global floating production systems market, which was valued in 2012 at US$12.6 bn, is expected to expand and reach a value of US$38.7 bn by 2019.

As per the report, deep water discoveries and increase in subsea drilling activities in the oil and gas industry in the Asia Pacific and Rest of the World have boosted the market for floating production systems. As per the statistics mentioned in the report, the Rest of the World market led the global floating production systems market in 2012, with the highest contribution in revenue. Additionally, Rest of the World has the highest demand for floating production systems, and will continue to dominate the market in the forecast period. However, factors such as tedious maintenance of these systems and the high installation costs of the systems could curb the growth of the floating production systems market.

There are primarily four types of products marketed under floating production systems: FSO, SPAR, TLP, and FPSO, out of which FPSO is expected to rule the market for floating production systems, since several companies use FPSO to extract crude oil or for offshore drilling activities. Since multiple tasks can be performed by FPSOs, it is the most preferred choice for the offshore drilling sector. Both FSO and FPSO help in reducing the operational costs by eliminating the need for pipeline infrastructure to transport the crude oil from one place to another.

TLP and SPAR are used in case the drilling site experiences high waves, causing huge vibrations, thus proving to be a hindrance in drilling operations. The use of SPAR and TLP helps eliminate these kind of vibrations, making the drilling operation smoother and efficient for a long time. Major utilization of TLP and SPAR is done in Africa and Brazil, due to the large number of drilling activities carried out in these regions. Moreover, the report forecasts that over 80 offshore drilling projects will be carried out in these regions in the coming years, thus propelling the market for SPAR and TLP.

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Since a large number of oil reserves in Europe are located in offshore regions such as the Norwegian Sea and the Barents Sea, steady growth of the floating production systems market is expected in these regions. Due to the growing population and heavy industrialization, Asia Pacific and North America are anticipated to witness growth of the market for floating production systems.

Some of the major companies listed in the report are Hyundai Heavy Industries Co. Ltd, Bumi Armada Berhad, Malaysia Marine and Heavy Engineering Berhad, Keppel Offshore & Marine Ltd, Mitsubishi Heavy Industries Ltd, SBM Offshore N.V., Samsung Heavy Industries Co. Ltd, Teekay Corporation, Technip S.A., and Worley Parsons Limited.

The report segments the floating production systems market as:

Floating Production Systems Market: End-user Analysis

• FPSO
• TLP
• SPAR
• FSO

Floating Production Systems Market: Regional Analysis

• North America
• Europe
• Asia Pacific
• Rest of the World (RoW)

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