Infield Systems Limited, 15 London Fruit & Wool Exchange, Brushfield Street, London E1 6HB. UK.
Tel:- +44 (0)20 7426 9660, Fax:- +44 (0)20 7247 5035, Email:- Email: Infield.

London, 24 May 2004

Floating Production Market
Set To Grow 67%

138 floating production systems are forecast to be installed with an expected capital expenditure of US$32.8bn. This is a 67% growth on the previous five year period according to Infield Systems Limited, City of London based energy analysts, in their new Global Perspectives Floating Production Market Update report.

The report uniquely provides an allocation of CAPEX in each year it is forecast to be spent. This introduces into the forecast, spend for projects that will come on stream outside the forecast period, which is important when considering their long lead times.

Annual expenditure is expected to exceed US$7bn with 139 FPSOs and FPSs being considered for 2004 onwards. Infield has identified that 65% of forecasted projects for the period to 2008 will be converted or upgraded vessels.

The forecast is of strong growth in the market with worldwide expenditure in the sector growing from US$5.9bn in 2004 to US$7.2bn in 2007. Globally the key areas will be Africa US$11.5bn, Latin America US$5.5bn, North America US$5.8bn, Asia US$4bn and Europe US$3.7bn.

The worldwide distribution of spend will be similar to the previous five year period with Europe showing more activity. Africa made up 30% of expenditure over the last five years and this will grow to 34%. North America will show some decline from 27.5% to 18% over the next five years. Latin America will maintain the same percentage share as the previous five years.

The fastest forecast growth compared with the previous five year period is in ultra-deepwater, over 1,500 meters, where expenditure is forecast to triple (312%). Deepwater activity between 500m and 1,500m will account for over half the FPS expenditure but spend in shallow water will still be important and represents 34% of global FPS expenditure in the period 2004 to 2008.

The Global Perspectives series of reports is based on Infield’s Worldwide Offshore Oil and Gas Database and the OFFPEX™ modelling & forecasting system. This proprietary OFFPEX™ system allows Infield analysts to drill down through each market sector to an individual project or component of an offshore field project and to analyse any part of the offshore industry in real time. Will Rowley, Infield’s Director of publications & analytical services division, said “the feedback so far has been tremendous with operators, contractors and the financial community amazed at the depth and ability of this new system”, this is summed up by a comment from a supermajor, “this report is of a quality equal to a global financial institution”.