Full impact of the financial crisis on the FPSO sector yet to be feltJun 27, 2012 13:44 SGT
The study suggests that the recent economic crisis has revealed that it’s becoming increasingly difficult for contractors to raise finance for leased FPSO projects. It seems that almost three quarters of those involved in our study feel that the economic crisis has made smaller players in the FPSO sector very vulnerable. On the other hand only 23.2% feel that the industry has had no impact as a result of the economic crisis, this could be because of the large order books that select companies have had prior to the economic situation reaching its crisis point or the significant cash reserves of these companies.
Source: Oil & Gas iQ
For FPSO players there will be a constraint on financing because banks are extending their project finance in Euros but for the players who are involved in U.S dollars the banks are exiting the market creating a gap that will need to be filled by alternate financing schemes. The most recent trend to address this gap is the bond markets; there is also an opportunity for the export credit agencies (ECA’s) in terms of funding, which we have noticed with large scale projects in Australia.
The general consensus in the market is that we have yet to see the full effect of the financial crisis on the FPSO industry and there could be several patterns developing because of these constraints.
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