FPSO InduStry trendS

w w w. fpsoa si a .co m

who are willing to share their thoughts on the trends in the floating. and given this lack of information in the market. oil & Gas iQ and the fpso Network. D espite the vast amounts of research on the fpso industry. there aren’t too many publications asking fpso owners and operators what they are DiD you know ? 45% of t hose polleD will Be ac tively iNves tiNG iN mooriNG aND riser s ys t ems FPSO InduStry trendS w w w. storage and offloading sector.com ©Burmi armada . production.IntroductIon continually investing in. fpsoa sia . have co – organised a study with 158 companies in the fpso sector.

this not only points to an immense amount of growth in the sector but possibly potential 35. a bold move. since the countries electric. 35. fpsoa sia . since the massive earthquake and ensuing tsunami that rocked the country in march 2011. power and gas companies have been criticized in Japan for allegedly buying the most expensive lNG in the world.8 % believe that the massive growth in oil fpsos is set to continue.5% 4. FPSo InduStry trendS competition for fpsos. Japan has turned away from nuclear and focused its power generation efforts on natural gas. FPSO InduStry trendS w w w.©modec the country that seems to be driving lNG demand is Japan. especially after increases of imports in 2011 and wider public awareness of less expensive gas in other regions of the world. 55.com . especially in North america. lNG fpsos will steal the limelight given the growing support for natural gas. 4. with the emergence of natural gas power generation and with many countries attempting to diversify their energy supply.3% of the survey respondents believe that over the coming years. the massive growth in the fpso sector is set to continue. But some respondents of the survey believe that this purple patch for the oil fpso sector will lose its shine because of the rise of lNG fpsos.3% 55.8% 32% lNG fpsos will steal the limelight given that natural gas is the next big thing it is time for unconventional resources to usurp the conventional ones others of the 158 people who took part in the survey.5% the massive growth in oil fpsos is set to continue D espite the economic uncertainty in capital markets.

com . the numbers are significant. Director. but now also co2 removal and co2 reinjection as well. and petrobras has a dozen. total now has at least six large new-build fpsos in operation. today we have 15 leased facilities in J erry Joynson. with another four close to delivery.1% the massive growth in oil fpsos is set to continue lNG fpsos will steal the limelight given that natural gas is the next big thing 67. explains that fpso projects are returning to pre-2008 level and a turn of fortunes for the sector is imminent. this can only mean an upturn in fortunes for the fpso sector as Jason waldie. “there was a material decrease in orders since 2009.” he said. associate Director for Douglas westwood. fpsoa sia . proposals & technology Development at sBm offshore. this trend will continue as operators try to squeeze as much value as possible from each fpso that enters service on the major fields. which adds up to a lot of new facilities required. explains the evolving dynamics in the fpso industry. this trend is continuing. “twelve years ago sBm only had two large fpsos in operation. and there are other companies with valuable experience too. LeaseD FPsos a significant number of respondents believe that oil operators prefer to lease fpsos rather than own and operate one. the deep water horizon disaster is unlikely to impact the fpso sector as the Gulf of mexico accounts for a small part of the market and in the long term it seems as though growth will return as the fpso market is set to reach Us$16 billion by 2014.” explained waldie who is responsible for the firm’s activities throughout the asia pacific region. the major growth opportunity is in deeper water which guarantees a healthy demand for floating production solutions for quite some time. with 69% of the respondents believing that this is the case 32. both new-build and conversions.” Joysnon explains. with many more planned. with the inclusion not only of sea water sulphate removal equipment almost as standard.so why wiLL this suPPoseD FPso growth materiaLise? operation. and around 60% of those are predicted to be fpso projects. with an increase in offshore production from 21 to 27 million b/d between 2008 and 2013. but it seems that market has bottomed last year and there is an increasing share of the market which is being leased to fpsos.9% FPSO InduStry trendS w w w. Joynson shares waldie’s sentiment. Kuito and espadarte. is increasing. our competitors have seen smaller but significant growth as well. Units are growing in oil production capacity and becoming more complex. by outlining the growth of the sBm over the past decade. “onshore oil production is in slow decline yet world oil demand owneD vs. this experience has transformed the fpso from being a niche product into a mainstream solution of choice in deep water.

therefore in this environment. then they will be a then they will be able to fund this ambitious project themselves. simply because operators will be able to access a lot of debt and be able to leverage the project and the pricing on the debt was very low. should an individual have a specific wish list for their new property. and using something that is readily available would probably be better than building something from scratch.” he said. financing would seem to be the major stumbling block that prevents this from happening. comes from the particular nature of the field itself. Ultimately determining whether to Why IS thIS So? the rationale for using a leased versus owned fpso is relatively simple. however. explains Dr. if the field is only going to last 5 years. roger Knight. and investment of $100 million is not required. although many fpso vendors may prefer the leased model instead of the own and operate model. “the most important rationale driving the decision to buy as oppose to lease. how this relates to solutions and associated charges presented within the leased market.com . the leased model is attractive when there is plenty of liquidity in the market. this is unlikely to be found on the rental market. if the individual has enough access to capital. from infield systems. making it ©modec difficult to get a high return. FPSO InduStry trendS w w w. for example wanting 10 bedrooms and a revolving roof. the tables have turned however and banks tend to extend less financing and with leverage being lower the cost of debt has increased. fpsoa sia . to use a home buying analogy.with a high leverage and low cost of finance the return of investment would be very high. and whether the operator is able to fund the capital required to own an fpso. lease or own an fpso boils down to the timescale of the field and how long the asset will be operating in the field. oil majors look at the cost involved when it comes to the rate over a specific period of time and realise that it may perhaps be better to own the asset.

7% risks are covered by others. the 12. making the type of work for each fpso very different. maintenance and operations and redeployment. it seems that they didn’t require the same importance as subcontractor management and understanding field specifications accurately. respondents felt that the two biggest subcontractor management and understanding field specifications accurately. a deep-water project on the other hand will be a more technically challenging project. for fpso projects. many in the sector think that these are the pressing issues that need to be overcome. the contracting work to the actual installation in the field may take up to a year. for a pure installation contract. the turnaround times for some of the smaller shallow water fpso projects are relatively redeployment FPSO InduStry trendS w w w. this is most likely the case when the oil company has already procured most of the equipment for the fpso project. the interface issues could become very complicated and this could ultimately lead to delays. from start to finish. because everything has already been designed and the epc only has the installation risk to be concerned over. while there were other issues that caused bottleneck issues such as commissioning. deep-water fpsos. contractors invest a significant amount into research and development to come up with solutions to these challenges.5% and 29. so the more technically challenging projects are seen as an opportunity rather than an obstacle.5% contractors seem to take on a lot more risks because the epcs are fully responsible for the design related aspect of the asset. fpsoa sia .©teekay BottLenecks quick. a lot of the 16.1% w issues were hen asked what part of the fpso chain poses the biggest bottleneck. where there are multiple contractors involved. the beginning of contract work to the execution of the contract could take as long four years. in these cases. more often than not. however. with 32.1% of the respective votes. 9% with larger. Understanding field specifications accurately subcontractor management commisioning maintanance and operations 32.8% 29.com . perhaps here’s why? although there are many engineering challenges.

the percentage of the total development costs is below the water line.5% FPSO InduStry trendS w w w. fpsoa sia .5% inDustry investment 26. the pipelines and the sub-sea trees is now more than the actual fpso.3% respondents are investing in turbines. compressors and engines. an fpso is a large investment but the installation costs. the equipment that will go onto the seabed will cost more and the expertise is rarer so ultimately the deeper you go the more expensive the project will cost. for deep-water fields.9% and 11.com . and engines mooring and riser systems t hat’s perhaps why the industry is continuing to actively invest in mooring and riser systems. while 13.3% 14.1% ©modec 11. the risers. when placing pipelines into deep-water. our research has revealed that 45% of our respondents will be actively investing in mooring and riser systems. water treatment / injection coating power / automation turbines. only 27% of the 45. compressors.3% of the respondents have claimed that they will be spending on water treatment and injection as well as power automation respectively.

what is very well known is that financial institutions have been weakened by the financial crisis which has spilt over to europe and is deeply affecting long-term financing capacity.4% others FPSO InduStry trendS w w w. have been deeply involved in fpso financing. to refinance themselves in U.s dollars the banks are exiting the market creating a gap that will need to be filled by alternate financing schemes.Financing avenues in the FPso sector projects.s dollars especially for long term financing.5% 23. so the trend in europe today is for banks to reduce their activities in U. but after 2008 this market disappeared. typically the banks and the project finance teams. the most recent trend to address this gap is the bond markets. fpsoa sia . in the past european banks have relied on the money markets in the United states.com ©Bluewater . and t he recent economic crisis has revealed that it’s becoming increasingly difficult for contractors to raise finance for leased fpso these assets have been typically financed under asset based financing schemes. when it comes to fpso financing there are typically very large transactions where there will be 5 – 15 banks involved in the financing of an fpso.2% feel that the industry has had no impact as a result of the economic crisis. it seems that almost three quarters of those involved in our study feel that the economic crisis has made smaller players in the fpso sector very vulnerable.1% the economic crisis has had no impact the economic crisis has made smaller players in the fpso sector very vulnerable 72. for fpso players there will be a constraint on financing because banks are extending their project finance in euros but for the players who are involved in U. which we have noticed with large scale projects in australia. only 23. 4. there is also an opportunity for the export credit agencies (eca’s) in terms of funding. the general consensus in the market is that we have yet to see the full effect of the financial crisis on the fpso industry and there could be several patterns developing because of these constraints.s dollars. this could be because of the large order books that select companies have had prior to the economic situation reaching its crisis point or the significant cash reserves of these companies.

australia. subsea7. sevan marine (coo). coo. unveiLeD showcase of brand new technologies and log on to www. siNGapore asiafleX proDUcts .com for a full list of speakers and the full congress agenda or email enquiry@iqpc. DoN’t miss the two eXclUsive site visits! sBm offshore’s fpsos iN Keppel shipyarD. enhanceD a superior venue with an improved exhibition space in singapore expo. Gm – proDUctioN.production).moNetisiNG offshore reserves with aDvaNcemeNts iN fpso techNoloGy 17-20 september 2012 | singapore expo researched & Developed by 13th aNNUal fpso coNGress what’s captivatiNG? reFineD an enhanced speaker profile for 2012 featuring Bumi armada (vp . maarten van aLLer. aBB. aibel.a techNip facility. coo.wartsila. woodside (Gm .fpsoasia. india and china.fps). Johor BahrU. PetroFac FLoating ProDuction Lars oDeskaug. UNpreceDeNteD represeNtatioN from oil operators. PhiLiPPines nationaL oiL corPoration inventive two exclusive site visits to sBm’s fpsos in singapore and technip’s production facility in Johor Bahru (malaysia). wooDsiDe energy updates from technip. sUBcoNtractors aND fiNaNciers carLos mastrangeLo. malaysia . Nigeria. DriLLeD Down Dedicated Geo Updates on the fpso industry from Brazil. pNoc (ceo). hempel. sevan marine michaeL hamBLin.com. wr facilities maNaGer. vessel owNers. ceo. petrofac floating production(coo).sg or ring +65 6722 9388 to find out how you can be involved. PetroBras antonio caiLao.

Sign up to vote on this title
UsefulNot useful