Oil prices have slid by almost 25% this year on the back of lower demand and slower expected economic growth, according to Rystad Energy. The outbreak of the coronavirus disease is to cause extensive staffing and supply shortages in the oil and gas industry, as well as a fall in investment of around $30 billion (£23.4bn) in 2020.
If the epidemic escalates, the delays could increase to nine or even 12 months, especially taking into account the restricted time windows for heavy transport, installation and hook-up. The average development time for an FPSO is 36 months, meaning that companies could face a 30% delay.
“Although operators and contractors are looking into ways to make up for some of the time that will be lost by fast-tracking other stages of development, we anticipate first oil or gas for these projects will face clear delays,“ says Rystad Energy Partner and Head of Oilfield Service Research Audun Martinsen.