Report : South America FPSO Market Forecast to 2028 – COVID-19 Impact and Regional Analysis – by Water Depth (Shallow Water, Deep Water, and Ultra-Deep Water), Hull (Single Hull and Double Hull), Mooring (Spread Mooring and Disconnectable Mooring), and Construction (Newly Built and Converted)
At 9.3% CAGR, the South America FPSO market is speculated to be worth US$ 8,084.45 million by 2028, says Business Market Insights
According to Business Market Insights’ research, the South America FPSO market was valued at US$ 4,338.40 million in 2021 and is expected to reach US$ 8,084.45 million by 2028, registering an annual growth rate of 9.3% from 2021 to 2028. Surging demand for natural gas and crude oil Demand Surging including significant advancements in subsea technologies are the critical factors attributed to the market expansion.
Technological developments have directly impacted Brazil and Argentina's economy, advancing it to a large extent. The use of oil in SAM has steadily decreased over the last three years. However, with the recovery of the crude oil market, the situation is likely to change, and companies are now looking for more oil and gas exploration and production. According to OilNow, 2022, Brazil, Mexico, and Venezuela produce most of the oil in South America. These three nations account for over 75% of the region's total output and are also global giants, ranking as the 10th, 11th, and 12th largest oil producers globally. South American oil output peaked at more than 7 million barrels per day a decade ago, with the current production surging to 7.5 million barrels per day. Rising oil output propels the demand for FPSO and other equipment, which bolsters the growth of The FPSO market in the region.
According to the International Energy Agency (IEA), expenditure on upstream activities in SAM is expected to increase due to high investment by Brazil, Argentina, and Colombia. Petrobras, a Brazilian state-owned oil company, plans to invest US$ 75.7 billion over the next five years to boost oil production. In addition, oil & gas-related projects are increasing, which increases the use of FPSO. For example, in June 2019, Total, a refining company based in France and its partner, took an investment decision for the second phase of the Mero deep offshore project, 180 kilometers off the coast of Rio de Janeiro, Brazil. Mero 2 floating production storage and discharge (FPSO) has a liquid treatment capacity of 180,000 barrels per day. For instance, in 2021, SBM Offshore, a Dutch corporation, was contracted by ExxonMobil to conduct Front End Engineering and Design (FEED) on its FPSO vessel for the fourth FPSO to be deployed in Guyana. For instance, in 2022, ExxonMobil started production at Guyana’s second offshore oil development on the Stabroek Block, Liza Phase 2, bringing total production capacity to more than 340,000 barrels per day. Thus, all these factors are driving the growth of The FPSO market in the SAM.
On the contrary, various challenges faced in FPSO implementation hurdles the growth of South America FPSO market.
Based on water depth, the South America FPSO market is segmented as shallow water, deep water, and ultra-deep water. Shallow water segment held the largest market share in 2021 which accounted for 49.5% with a revenue of US$ 2,148.84 million. It is further projected reach US$ 5,074.50 million at 13.1% CAGR during 2021-2028.
Based on hull, the South America FPSO market is bifurcated into single hull and double hull. The ssingle hull segment held 56.7% market share in 2021, amassing US$ 2,460.78 million. It is projected to garner US$ 4,917.40 million by 2028 to expand at 10.4% CAGR during 2021–2028.
Based on mooring, the South America FPSO market is segmented as spread mooring and disconnectable mooring. With a share of 53.7%, spread mooring segment held the largest market share in 2021. Further, in 2021 it held US$ 2,330.09 million and is forecasted to reach at US$ 4,825.23 million by 2028 at a decent CAGR of 11.0%.
By construction, the South America FPSO market is fragmented into newly built and converted. With 75.4% share of the domain, the newly built segment dominated the market in 2021. It accrued US$ 3,272.64 million in 2021 and is estimated to generate US$ 6,558.11 million by 2028 to grow at a CAGR of 10.4% over the forecast period.
Our regional analysis states that the Brazil captured 61.9% market share in 2021. It was assessed at US$ 2,686.12 million in 2021 and is likely to hit US$ 5,219.25 million by 2028, exhibiting a CAGR of 10.0% during the forecast period.
Key players dominating the South America FPSO market are BW Offshore; CNOOC Limited; Energies; Equinor ASA; Exxon Mobil Corporation; MODEC, Inc; Petrobras; SBM Offshore; and Shell Plc.
The companies are focused on adopting organic growth strategies such as product launches and expansions to sustain their position in the dynamic market such as:
- In 2020, MODEC, Inc. has announced the approval by the American Bureau of Shipping for the new offshore repair method which has been developed jointly with Toray Industries, Inc. for hull structures of floating oil and gas production facilities such as FPSO vessels as an original standard repair method.
- In 2020, The Shell plc. is the fourth production system to be deployed in the Mero field. The final investment decisions were previously taken for the Mero 1, Mero 2, and Mero 3 FPSOs. Each unit has a daily operational capacity rate of 180,000 barrels of oil/day. The Pineiro de Libra FPSO has been producing at Mero since 2017 and is a key source of information for the Libra consortium to aid further development and optimize the productivity of the field, reservoir, and wells.
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