Energy consultancy group Westwood has released its latest research, which has found that floating production system (FPS) contracts in the offshore sector will rebound to a value of $13bn between 2021 and 2024.

The group noted that while the short-term value of these contracts is expected to fall significantly due to the Covid-19 pandemic – from around $13bn in 2019 to just over $5bn by the end of 2020 – resurgent oil prices could help reverse this decline. With oil prices expected to reach $60 per barrel from 2022, up from $37 per barrel in 2020, the group believes there is cause for optimism within the sector.

“While the impact of the pandemic has hit FPS engineering, procurement, and construction contract awards significantly this year, the industry is in a much better place than the downturn of 2016 based on order intake so far, as well as the healthy backlogs of FPS contractors stemming from 2017-2019 activity,” said Mark Adeosun, senior offshore analyst at Westwood.

“Over the next five years, Latin America will account for nearly 42% of probable FPS awards, totalling an estimated $24bn,” Adeosun continued. “Brazil is expected to dominate investment, as international oil companies ramp up activity and Petrobras commits to the development of its pre-salt discoveries.”