FPSO'S

[10 bagger]

Floating production boom continuesBy Karen Broyles
Filed from Houston
5/27/2008 5:04:25 PM GMT

Demand for floating production systems (FPSs) will continue growing as strong oil and natural gas prices drive efforts to explore for and develop more oil and gas reserves in deeper water around the globe. This year, 44 FPSs are expected to be deployed, up from 28 units deployed in 2007 and 24 deployed in 2006.

As of this month, 24 FPS projects are scheduled for deployment in 2009 and 12 projects are planned for deployment in 2010.

So far this year, 21 discoveries have been made worldwide in water depths greater than 1,500 feet (457 m). The most recent discoveries augment the 40 discoveries made in more than 1,500 feet (457 m) of water last year. Given that the year is not even halfway over, the 40 discovery mark could be surpassed.

Cascade-Chinook FPSO

The energy industry continues to achieve new milestones in the development and use of floating production, storage and offloading vessels (FPSOs). One example is Petrobras' Cascade-Chinook project in the U.S. Gulf of Mexico, which involves the first use of an FPSO facility in the region.


The U.S. Minerals Management Service (MMS) has approved development plans for the Cascade-Floating production demand continues upward


Chinook oil and natural gas project in the Walker Ridge area of the U.S. Gulf in 8,200 feet (2,499 m) of water, 165 miles (265 km) offshore Louisiana. The Cascade-Chinook project also will be the first production from deepwater discoveries in the Lower Tertiary trend of Walker Ridge and Keathley Canyon in the Gulf of Mexico.


MMS Regional Director for the Gulf of Mexico Lars Herbst said, "This is an important step for Petrobras and all oil and gas operators exploring in deepwater Gulf of Mexico. The FPSO and many associated first-use technologies lead the way in providing the infrastructure necessary to produce safely in the Gulf's ultra-deepwater."

New Technology

SBM Atlantia unveiled its latest FPSO mooring technology at the Offshore Technology Conference in Houston earlier this month. The MoorSpar system is aimed at improving the efficiency and cutting the cost of deepwater and ultra-deepwater developments.

The system is a disconnectable FPSO mooring system that makes possible the use of lower-cost, efficient steel catenary risers (SCRs) in deepwater and ultra-deepwater harsh environments such as the Gulf of Mexico.

The MoorSpar unit consists of a truss structure set atop a long, slender buoy and moored to the sea floor by a combination of lateral polyester lines and vertical tethers. The FPSO is connected to the facility through an articulated yoke system linked to a main roller bearing situated below a gimbal table at the top of the Moor Spar unit. The arrangement accommodates the vessel's roll and pitch motions, while still allowing the FPSO to weathervane as necessary.

SCRs are, in turn, connected to the MoorSpar unit at riser porches located along the keel of the buoy. The risers are then linked to internal piping, which is routed up through the central column and then across hard piping and swivels to the FPSO. The MoorSpar system can be used in the development of high pressure and high temperatures reservoirs as it avoids the use of flexible jumpers and risers.

FPSO market

Fred. Olsen Production reports that 2008 has started with some signs of a positive upswing in the number of tender opportunities in the FPSO sector. "This is in line with our comments in the last quarter that projects delayed in 2007 due to drilling capacity constraints and development cost increases would be reactivated in early 2008.

"However, as previously advised, a number of speculative FPSO conversions and FPSOs without contract employment continue to create a near terms pressure on returns mainly in the lower end of the FPSO market," Fred. Olsen officials said.

The conversion of the Suezmax tanker Knock Allan into an FPSO for Canadian Natural Resources' Olowi field offshore Gabon is progressing according to plan, with a scheduled start-up in October of this year. The project currently is in a critical phase of the conversion work, receiving sub-supplies in Dubai Drydocks for installation on board the FPSO.

Sevan Marine reports that its Sevan concept for FPSOs has been accepted by oil companies following offshore installation of FPSO Sevan Piranema at the Piranema off Brazil and FPSO Sevan Hummingbird at the Chestnut field in the North Sea.

Motion characteristics of FPSO Sevan Hummingbird have been recorded and concluded to be in accordance with or better than model tests and analysis. Motion data from FPSO Sevan Piranema also confirm better than anticipated motions compared to model tests.

Sevan officials anticipate the company will land more FPSO work in its existing markets in Brazil, the U.S. Gulf and the North Sea. In addition, Sevan is tracking several potential projects in the new FPSO markets of India, West Africa, Australia and the Far East.

Sevan's development of alternative technologies is progressing. Sevan is performing studies and negotiating with clients for Sevan's floating liquefied natural gas (FLNG) FPSO and for LNG topsides.

Construction work is on schedule for FPSO No. 4 at China's Hantong Shipyard. Hull and living quarters are set to be completed in this year's second quarter. FPSO Sevan Voyageur is undergoing hook-up and topside installation at Keppel Verolme in Europe. The FPSO will be installed at the Shelley field in the UK North Sea in this year's third quarter.

Ezra Holdings' construction and production arm, EOC Ltd., is bidding for FPSO and floating storage offloading contracts worth more than US$800 million. Ezra Holding Managing Director Lionel Lee described EOC's FPSO business as the next wave of growth for the company as evidenced by recent bidding round and contract awards.

EOC Ltd. is expected to take delivery of its first FPSO in July. The vessel is now undergoing final conversion at Keppel Shipyard's facilities in Singapore.

When complete, the vessel will leave Singapore to work on PTTEP's Arthit gas development in the Gulf of Thailand.

Completion of Norway-based Aker Solutions' first FPSO is on track for a scheduled sail-away in this year's second quarter, but previous cost estimates for the FPSO will be exceeded. Aker Floating Production will need to secure additional financing to complete the FPSO.

The cost increase is mainly due to underestimation and supply constraints. The previous cost estimate of US$714 million will now be 10 percent higher.

Eni Norge AS awarded Aker Solutions a competition contract for the front-end engineering and design of the FPSO for the Goliat field. The Goliat project is located in the Barents Sea northwest of Hammerfest in about 1,312 feet (400 m) of water. The Aker Solutions alternative is based on a Condeep MonoFloater design known as a Geo-stationary FPSO. Engineering work has already started and will continue through early autumn 2008.

Aker Solutions' Condeep Monofloater design is capable of producing 100,000 b/d of oil and nearly 42 MMcf/d of gas while storing up to 950,000 barrels of oil. In addition to the offloading function, the vessel is designed for minimum emissions to air and partial power from shore, as well as full injection of produced water.

Future Development

Addax Petroleum reports that a pair of appraisal wells at its Ofrima North discovery in OML137 offshore Nigeria, have shown enough for a new standalone oil production hub utilizing an FPSO and subsea tiebacks. The company intends to work closely with relevant Nigerian government agencies on plans for development with potential production as early as late 2009.

MEO Australia initiated a review of FLNG design concepts during the quarter ended March 31, citing FLNG as the quickest way to develop early production and cash flow for any new discovery. MEO Managing Director Christopher Hart said both international oil companies and "very competent contractors" are now advocating this approach as current indications of construction costs for onshore plants is becoming prohibitive.