Procurement in Offshore Oil and Gas to Remain Robust in 2025
Global EPC (engineering, procurement and construction) contracting in the offshore oil and gas sector continues to flourish, despite headwinds in the fossil fuel industry.
Westwood Global Energy, an energy market research firm, reports a steady demand for hydrocarbons and predicts significant contract awards in 2025.
Projects involving subsea equipment, offshore platforms, floating production systems and LNG (liquefied natural gas) infrastructure are expected to drive billions in investment.
Offshore procurement activity in 2024
In 2024, offshore EPC activity remained robust, with subsea and platform contracts alone valued at approximately US$52bn.
This represents an 18% year-on-year (YoY) increase, even though the number of final investment decisions (FIDs) — a key milestone when projects are officially approved — dropped by 33% compared to 2023. The apparent contradiction between fewer FIDs and higher contract values is largely due to the size of key awards.
For instance, Petrobras, the Brazilian oil and gas giant, awarded contracts for its P-84 and P-85 floating production, storage and offloading (FPSO) units, collectively valued at more than US$8bn.
Similarly, Shell’s Sparta project saw a late EPC award for a floating production semi-submersible (FPSS) unit, confirmed in January 2024. Additionally, Petrobras issued major subsea contracts for its Buzios and Mero projects.
The Americas dominated the subsea equipment market, accounting for 65% of the 250 subsea tree units awarded globally in 2024. Notable among these was ExxonMobil’s Whiptail development offshore Guyana, which was the year’s largest subsea tree project.
The floating production systems (FPS) segment also grew, with 11 EPC awards secured in 2024. These units boast a combined throughput capacity of 1.57 million barrels of oil equivalent per day (mmboepd), including both oil and gas production and eight million tonnes per annum (mmpta) of LNG capacity. Of these, seven were newbuilds, three were conversions and one was an upgrade of an existing facility.
Meanwhile, fixed platforms — used for drilling and production in shallower waters — were particularly strong in the Middle East, which accounted for 58% of the 66 contracts awarded in this category.
Saudi Aramco alone contributed to 38% of the global fixed platform awards, despite cancelling plans to expand its production capacity in early 2024.
2025 outlook: Balancing growth and cost challenges
Westwood predicts a marginal 1% increase in offshore oil and gas-related EPC contracts in 2025, with a total projected value of US$54bn. This cautious growth reflects the ongoing impact of supply chain cost inflation, which has delayed several projects since 2022.
In response, operators are refining field development plans and seeking cost-efficient procurement strategies.
EPC activity in 2025 will be supported by an expected demand for more than 290 subsea tree units, 18 floating production systems (including four FLNG units) and more than 90 fixed platforms.
The subsea umbilical, riser and flowline (SURF) market is also set to be active, with contracts covering 3,650km of SURF lines and 2,660km of pipeline infrastructure.
Notable projects in the FPS market include Eni’s Baleine Phase-3 in the Ivory Coast, Shell’s Gato do Mato in Brazil and UTM Offshore’s Yoho FLNG unit in Nigeria.
However, the sector’s share of overall EPC value is expected to decrease slightly in 2025 due to a shift towards upgrading existing units rather than building new ones.
Geographically, Africa and the Americas will lead offshore procurement in 2025, accounting for 26% and 25% of the global market, respectively.
In Africa, key projects include ExxonMobil’s Owowo field and TotalEnergies’ Preowei development, both offshore Nigeria.
Meanwhile, Brazil’s pre-salt basin and Mexico’s Zama field are expected to drive activity in the Americas. The Middle East, with its focus on brownfield developments and major projects by Saudi Aramco, ADNOC and QatarEnergy, will represent 24% of the EPC market.
Beyond 2025: Long-term opportunities
From 2026 to 2029, offshore EPC activity is projected to average US$50bn annually, sustained by strong hydrocarbon demand from OECD countries and steady oil consumption in China. This forecast is underpinned by stable oil prices — expected to remain above US$70 per barrel — and easing supply chain costs.
Significant future opportunities include ExxonMobil’s operations in Guyana’s Stabroek block, Namibia’s deepwater prospects, and long-delayed LNG projects in Asia-Pacific, such as Indonesia’s Abadi and Australia’s Browse development.
Emerging markets, like Timor-Leste’s Greater Sunrise field and Shell’s recent gas discoveries in Colombia, may also provide upside potential.
Despite challenges such as high costs and fluctuating demand, procurement activity in the offshore sector is expected to remain strong.
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