SBM Offshore’s holiday season brightened with the award of an FPSO contract for ExxonMobil Corp.’s (NYSE: XOM) Liza development offshore Guyana, giving a glimmer of hope for the ailing FPSO market sector.

ExxonMobil said Dec. 20 that it has selected SBM Offshore to carry out FEED work for the FPSO vessel that will be used at the Liza Field, which is estimated to hold more than 1 billion oil-equivalent barrels. If a final investment decision (FID) is made on the project, the company would also build, install and operate the vessel. Word on the FID is expected in 2017.

“We are proud that ExxonMobil has awarded SBM Offshore contracts for the Liza FPSO, starting with the front-end engineering, which forms an important part of a significant offshore development project,” SBM Offshore CEO Bruno Chabas said in a statement. “Our dedicated team is looking forward to cooperating closely with the ExxonMobil team to make this project a success. This award underlines the fact that experience matters across the entire FPSO life cycle.”

The contract is seen as a significant step in moving the fast-tracked Liza project forward. Plans include linking the FPSO to subsea umbilical, riser and flowline systems.

“Liza development activities are steadily progressing, and we’re excited to reach this important milestone,” said Neil Duffin, president of ExxonMobil Development Co.

Results of the latest appraisal well drilled—the Liza-3—boosted confidence for the play-opening discovery.

“Based on the positive results of the Liza-3 well, we now expect Liza to be at the upper end of the previously announced estimated recoverable resources range of 800 million to 1.4 billion barrels of oil equivalent,” John Hess, CEO of project partner Hess Corp. (NYSE: HES), said during the company’s third-quarter 2016 results.

The news is encouraging for the FPSO sector, where activity has drastically slowed.

“We have a very large market population of FPSOs available for these types of projects and they cost less than converting into an FPSO, let alone building a new one,” Caitlin Shaw, research director-upstream supply chain for Wood Mackenzie, told Hart Energy. “It’s one of the strategies that we’ll see some oil companies pursue. There will still be some who don’t want to tap into that [leased FPSO] market.”

Regardless, operators are evaluating creative ways to bring fields to development by tapping into the FPSO market, she added.

Shaw forecasts the number of floating production orders will rise in 2017 and 2018, which is needed “just by virtue of expanding and moving farther away from areas with production infrastructure in place whether that’s new, frontier areas like offshore Guyana or the Falkland Islands, or just going into deeper waters like we’ve seen in the Gulf of Mexico.”

Although the forecast points to growth ahead, Shaw cautioned that the rise will be a fraction of what the industry saw in the previous five years. Back then, Petrobras—a deepwater powerhouse—ordered a lot of FPSOs as it planned to develop deepwater fields, including in pre-salt layers.

The firm does not anticipate seeing trends at those levels going forward, Shaw said.

Spanning 26,800 sq km, the Liza Field is located offshore Guyana in the Stabroek Block.

ExxonMobil affiliate Esso E&P Guyana Ltd. is the operator with a 45% interest in the block. Hess Guyana Exploration Ltd. holds a 30% interest, while CNOOC Nexen Petroleum Guyana Ltd. has 25%.

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Velda Addison can be reached at vaddison@hartenergy.com.

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