45 MARKET LANDSCAPE VALUE CREATION AT YINSON | MARKET LANDSCAPE OFFSHORE PRODUCTION As global energy demand escalates, offshore production remains crucial to meeting this surge. Global oil demand increased to 101.7 million barrels per day in 2023, according to the International Energy Agency (“IEA”). This marked an uptick from 100.8 million barrels per day in 2022. Brent crude oil prices started the year at approximately USD 77 per barrel, peaking at around USD 86 per barrel mid-year. The market was relatively stable, as it generally traded between USD 75 and USD 85 per barrel throughout the year. This stability underpins a robust FPSO market in 2023. Global sentiment is shaping energy policies, as nations aim to balance increasing energy demand for economic growth and energy affordability for their citizens paired with sustainability commitments. The uncertain geopolitical climate further emphasises the importance of energy security on global and national levels. Countries are responding by strengthening their energy infrastructure and diversifying energy sources, including offshore oil production, to meet rising demand. The market for FPSO projects in 2023 continued to demonstrate resilience, buoyed by stable oil prices and consistent demand. Looking forward, the market is poised for substantial growth, with projections indicating a continuing rise in investments over the next five years. This growth trajectory is fuelled by the critical role FPSOs play, not only in production of existing fields, but also in developing production of new offshore oil fields, particularly in deepwater and ultra deepwater settings where they are often the only viable solution. HISTORICAL AND PROJECTED GLOBAL OIL DEMAND Global oil demand (million barrels per day) Source: Rystad, Wood Mackenzie, IEA Stated Policies Scenario 2021. 110 90 95 100 105 2020 2025P 2030P 2035P Projected oil demand in 2035: 108 milllion barrels per day Projected oil demand in 2024: 104 milllion barrels per day 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024P 2025P 2026P 2027P 2028P 2029P 2030P 1 2 3 4 5 7 6 HISTORICAL AND PROJECTED FPSO OIL PRODUCTION BY WATER DEPTH Ultra deepwater 7% CAGR Deepwater 0% CAGR Shelf -4% CAGR Notes: Shelf water depth is <125m, Deepwater depth is 125m to 1500m, Ultra deepwater depth is >1500m; CAGR projection is for 2023 to 2030. Source: Rystad Energy (July 2023); Energy Maritime Associates – Floating Production Systems Outlook Report, 2023. Historical Forecast Global oil production from FPSOs (milllion barrels per day)
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