Beng Kuang Marine Poised for Growth as Offshore Oil Production Continues to Expand
Still Not Vested
In my previous article, I have discussed Beng Kuang Marine, a company that offers maintenance services for Floating Production Storage and Offloading (FPSO) vessels used in offshore oil production. According to Rystad Energy, an energy consultancy, offshore oil production sites are generally more expensive to build than onshore shale sites. However, once established, offshore sites can generate profits at lower prices compared to other forms of production. The average break-even price for producing offshore projects is $18.10 per barrel of oil equivalent, which is lower than the $28.20 per barrel break-even price for onshore production.
While some sources on the internet suggest that the cost of offshore oil production could rise to as much as $50 per barrel, many operators are still ordering new FPSO vessels.
|Source: Offshore Magazine|
In 2022, there were as many as 30 new FPSO orders, despite the fact that there are already 179 operating and available FPSO vessels. Even with the potential increase in production costs, there are still profits to be made at current oil prices of over $70 per barrel.
|Source: Trading Economics Website|
With over 200 FPSO vessels expected to be in operation in the future, Beng Kuang Marine is likely to experience an increase in demand for its maintenance services. As a company that primarily provides maintenance for FPSO vessels, this increased demand represents a significant opportunity for growth. As the supply of FPSO vessels increases, the demand for maintenance services is also expected to increase.