59 INTEGRATED ANNUAL REPORT 2025 BUSINESS REVIEW | YINSON PRODUCTION Global demand for oil to remain high FPSOs are the key solution for deepwater production Offshore liquid supply is essential to meet global demand Other market factors • Global oil demand is expected to reach 111 million barrels per day by 2033, with continued growth until that point largely driven by developing economies. • Peak oil demand has been revised beyond 2030 due to slower-than-expected energy transition and limited alternatives for industries that are heavily reliant on fossil fuels. • New projects remain essential to compensate for natural declines in existing fields. • Offshore production is expected to account for 32% of new global production, of which 72% is expected to be deepwater. • From a cost perspective, offshore projects remain competitive, with deepwater projects demonstrating strong economics and a breakeven price of USD 33 per barrel. • Ultra-deepwater projects are forecasted to grow at a CAGR of 8%, while deepwater projects are expected to grow at a CAGR of 2.2% from 2024 to 2030. • FPSOs continue to dominate the floating production sector, representing 54% of all floating production units installed globally between 2010 and 2023. • In 2024, four FPSO contracts were awarded, reflecting a decrease in number of contracts but an increase in CAPEX per project, as operators shift to larger, higher-capacity FPSOs. • Near-term demand remains strong, particularly for mid-sized FPSOs, which require investments of USD 1 to 2 billion each and account for 30% of total FPSO CAPEX. • Strong case for FPSO conversions and redeployments due to cost advantages and shorter delivery schedules compared to new builds. This segment represents 48% of the forecasted total number of new orders in the next five years. • South America and West Africa continue to be the main growth regions for FPSO awards, with approximately 35 out of the 54 expected FPSO projects between now and 2029 located in these regions. MARKET OVERVIEW AND OUTLOOK Sources: Rystad Energy, Global FPSO and CCUS Market Outlook Report, December 2024; Energy Maritime Associates, Floating Production Systems Outlook Report Series, October 2024. Yinson Production’s positioning Yinson Production is strategically positioned to benefit from market trends, particularly in the conversions and redeployments segment, where demand continues to grow. Focus on cost-effective solutions, sustainability, and operational excellence ensures alignment with industry demands for lower carbon intensity production and improved efficiency. Yinson’s presence in key regions such as Brazil and West Africa provides a competitive advantage in capturing upcoming opportunities.
RkJQdWJsaXNoZXIy NDgzMzc=