Some 30 FPSOs Could Go off Hire by 2022 End, Westwood Says

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May 19, 2021
Credit: Danial/AdobeStock

Credit: Danial/AdobeStock

The number of FPSO leases set to expire in 2022 is significantly higher than the yearly average of ~3 since 2015, with the potential of 30 units becoming available by end of 2022, energy market research firm Westwood said Wednesday.

Westwood says that under a scenario where no contract extensions are taken on currently leased FPSOs, 14 additional units would become available in 2022. 

Alternatively, if all available extension options were taken, nine units would come off-contract adding to the 16 units currently awaiting upgrade or redeployment. Of those coming off contract in 2022, 36% are 40+ years old and are potential candidates for scraping, Westwood said.

Mark Adeosun, Senior Analyst at Westwood said: “This outlook uncovers a risk for FPS lease contractors such as BW Offshore and Modec who have recently enjoyed resurgent EPC activity but are now facing potentially significant backlog and revenue issues in the operations and maintenance part of their businesses.” 

However, Westwood's analysis also highlights the upside potential for E&P companies sitting on marginal reserves. 

"These operators could take advantage of the current rebound in oil prices and FPSO availability to accelerate project sanctioning and in turn enjoy more cost-effective field development," the company said.

Adeosun said: "There has been significant growth in FPS orders since 2016 and that improved market sentiment has translated into operators revisiting projects previously stalled by the 2020 oil price crash. We expect to see up to 17 FPS awards, valued at ~$18bn over 2021, up 72% on our Q4 2020 outlook."


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