10 REASONS

WHY THE OIL & GAS

INDUSTRY LOVES

FPSOs

Bluewater

10 REASONS
WHY THE OIL & GAS INDUSTRY LOVES FPSOs

According to the latest data, in the oil and gas industry today there are 190 FPSOs in commission around the
world, 172 of which are actively operating on fields. In 2010, it was estimated that the global FPSO market
was worth $5.5 billion, by 2014 it is set to hit $16 billion - a 72.5 per cent year on year increase. Growing
energy demands in the Orient and Occident alike and discovery of new oil and gas fields will only serve to
push the market higher.
In this piece, we take a look at some of the reasons why oil and gas companies in arenas from the
Arctic to the South China Sea are embracing this one-stop-shop vessel as their unit of choice.

Modec

THE 14TH ANNUAL

16-19 September 2013

MAX Atria @ Singapore Expo

www.fpsoasia.com

10 REASONS
WHY THE OIL & GAS INDUSTRY LOVES FPSOs

SWIFT ROLL OUTS

= QUICKER TIME TO
PRODUCTION

Compared to other genres of floating hardware in

the oil and gas arena, the turnaround on an FPSO can
be relatively short. The average semi-submersible oil
rig takes between three and four years to kit out and
build, and a jack-up rig between two and three years.
From laying the keel in dry dock to first launch, an
FPSO could be rolled out in months to a year, or even
less if an existing vessel is simply being modified into
an FPSO.

LESSENED INVESTMENT =
DIMINISHED OVERHEADS

As an example of how much a rig costs, the Deepwater

Horizon was commissioned for $560 million in 2001
whereas an FPSO refit or fresh construction would
cost considerably less.
The largest FPSO in operation today - Exxons
Kizomba A - cost $800 million to construct, but with
the ability to be easily refitted at regular intervals, it
will outlast its fixed position counterparts by decades.

THE 14TH ANNUAL

Prosafe

16-19 September 2013

MAX Atria @ Singapore Expo

www.fpsoasia.com

10 REASONS
WHY THE OIL & GAS INDUSTRY LOVES FPSOs

FPSOS DO NOT HAVE TO BE CUSTOM BUILT

FPSOS CAN EVADE HARSH WEATHER

Unlike their fixed platform and semi-submersible counterparts, an FPSO does not have
to start its life as an FPSO. The first ever floating production, storage and offloading
unit, BPs Castelln, was an oil tanker in a former life, and many of its descendants are
also vessels that have been converted from transporters to harvesters of hydrocarbons.
Recycling assets in this way brings inherent cost-saving benefits, although design
issues may arise with regards to access/egress regulations and the layout of ship
activities will differing to that for oil and gas production, particularly in the area of
berthing personnel.

Unlike their fixed position cousins, many FPSOs are mobile units and, as such, are
able to navigate away from potentially perilous weather conditions. Semi- permanent
anchors can be cast off - with enough forewarning- and risers disconnected to escape
adverse weather events. In cases where elusion is not an option, side thrusters can be
used to maintain an even kilter.

MISC Berhad

In this way, FPSO have a strong advantage over permanent installations, particularly in
the hurricane-riddled Gulf of Mexico, cyclonic activity zones like the South China Sea
and iceberg-infested waters around the Arctic circle.

FPSOS CAN HOP FROM FIELD TO FIELD

FPSOs were initially conceived as the panacean solution to develop marginal fields and so find themselves ideally disposed to a world with rapidly exhausting conventional
reserves.
Once the source of hydrocarbons has plateaued or headed for decline in a specific site,
an FPSO unit can then move on to its next target. Although subsea tie-backs are now
increasingly common, FPSOs allow owner/operators the option to dispense with the
overheads incurred by costly platforms whilst retaining value in a reusable unit.

THE 14TH ANNUAL

16-19 September 2013

MAX Atria @ Singapore Expo

Modec

www.fpsoasia.com

10 REASONS
WHY THE OIL & GAS INDUSTRY LOVES FPSOs

ABANDONMENT COSTS ARE

SIGNIFICANTLY LESS THAN FOR FIXED
PLATFORMS

When a well becomes economically unviable due to under-production

or depletion, the removal of equipment, capping of the well and any
environmental clean up that has to be enacted before the well can be
abandoned, could reach into the hundreds of millions of dollars. An
FPSO considerably minimises this expenditure as little permanent
infrastructure has to be considered.

FPSOS ARE IDEAL FOR DEEP WATER

DRILLING

With operators having to drill deeper than ever before to hit the
black gold, deep and ultra-deep water plays like the Santos Basin,
the US Gulf Lower Tertiary and the Arctic region are becoming more
plausible choices for an oil-thirsty world. In areas such as these, where
subsurface pipelines would be logistically challenging and export by
shuttle tankers is increasingly expensive, an FPSO provides the best of
both worlds as a tailored upstream and midstream unit rolled into one.

ASSET INTEGRITY COSTS LESSENED

WITH FPSOS

Safety and maintenance is always a game of margins, and with fixed

structures invariably located in harsh climates and rough waters, risks
and costs are high. With smaller crews, the ability to dodge adverse
weather events, and the mobility to put into port or dock for regular
repair and inspection, the FPSO is its own solution to the problem of
offshore asset integrity.

THE 14TH ANNUAL

Burmi Armada

16-19 September 2013

MAX Atria @ Singapore Expo

www.fpsoasia.com

10 REASONS
WHY THE OIL & GAS INDUSTRY LOVES FPSOs

FPSOS ELIMINATE THE NEED FOR COSTLY AND SPRAWLING

UNDERWATER INFRASTRUCTURE

In a situation where laying pipelines is not a cost-effective solution, the FPSO is particularly well-adapted. FPSOs
tap in to existing well centres with its retractable risers, negating the need for extensive undersea hydrocarbon
transportation.

10

FPSOS ARE MORE ENVIRONMENTALLY-FRIENDLY

THAN RIGS

In the post-Macondo era, the potential of the oil and gas industry to do severe and life-changing damage to the
environment has been highlighted to an extent not seen since the Exxon Valdez disaster of the 1990s. While many rigs
have been in operation for several decades and have a permanent ecological footprint, an FPSO can be designed and
redesigned for more environmentally friendly field operations than their immovable brethren.

THE 14TH ANNUAL

16-19 September 2013

MAX Atria @ Singapore Expo

www.fpsoasia.com

THE 14TH ANNUAL

16-19 September Singapore Expo

CRITICAL KEYNOTE INSIGHTS FROM LEADING VESSEL OWNERS, OIL
OPERATORS, EPCS, SUBCONTRACTORS AND FINANCIERS

OVER

OVER

500

60

DELEGATES

10

SPEAKERS

JON DUNSTAN,
COO,
EMAS OFFSHORE

MAARTEN VAN ALLER,

COO, PETROFAC FLOATING
PRODUCTION

OVER

HOURS NETWORKING

MARTIJN DEKKER,
STONES FIELD DEVELOPMENT
MANAGER, SHELL

THYL KINT,
CTO,
BW OFFSHORE

HASSAN BASMA,
CEO,
BUMI ARMADA

JOSE LUIS RODRIGUES DA CUNHA,

P55 CONSTRUCTION MANAGER,
PETROBRAS

WWW.FPSOASIA.COM