September 2020 Monthly Floating Production Systems Report
Rebalancing the oil market and reinvigorating upstream investment is proving difficult. A new wave of virus infections over the past month has lowered projections for near term growth in oil demand. OPEC+ easing of production constraints raised crude supply beginning August. Oil inventory remains stubbornly high and slower demand growth + increased supply will slow rebalancing. Crude prices, which had risen to the mid-$40s last month, are again back in the low $40s -- and most field operators continue to hold onto cash, defer investment decisions. But Petrobras continues to be a bright light in an otherwise subdued production floater market. In September Petrobras said it is negotiating with SBM to lease a 6th FPSO for use on the Buzios complex in Santos Basin. The contract was expected to be tendered to several contractors in usual fashion – but SBM was the only contractor capable of supplying the large FPSO in the time frame Petrobras requires.