KMI International Symposium

30th March 2011

Experiences & Challenges in

FPSO/FSO Operations in Malaysia
Captain Hisham Hashim
30th March 2011

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Presentation Structure

Introduction Global Mariner Offshore Services (GMOS)

FPSO/FSO Definition. Why FPSO/FSO? Applications

Issues & Experience on FPSO Perintis, FSO Ratu Songkhla and FSO
Challenges Puteri Cakerawala

Managing Issues Hands on and Lessons Learnt

and Challenges

Floaters Outlook Recent Malaysian Outlook

Concluding Future Prospect

Remarks

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Global Mariner Offshore Services
GMOS - What we do

•Established in 2010

•Marine Consultant Specializing and

Technical Services Company specializing
in the Offshore Energy Sector

•Network of associate consultant

across the globe with specific
expertise

•Services in business & technical

management consultancy, marketing
& sales consultancy and offshore
renewable energy.

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 FPSO/FSO Definition

Floating Production, Storage and Offloading

• Marine facility to provide storage and tank management

• Topside process plant for hydrocarbon separation and

stabilisation (FPSO)

• Other ancillary services i.e. Power Generation, Water Injection,

Gas Lift and Gas Export

• Terminal facility - Pilotage, Tandem Mooring, Custody Metering

and Offloading

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FPSO/FSO Is it a Marine or Oil & Gas facility?

Tanker Production
Platform

Kikeh

Source: PraGlobal

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FPSO/FSO Is it a Marine or Oil & Gas facility?

Tanker Production
Platform

Kikeh

Source: PraGlobal

FPSO

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FPSO/FSO Applications

• Suitable for Marginal Fields - Hummingbird concept

• Offshore Development Hubs
• Early Production System (EPS)
• Life of field production
• Extended Well Test (EWT)
Kikeh

Source: PraGlobal

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 FPSO/FSO Why FPSO/FSO

FPSOs are preferred in frontier offshore regions and

Marginal Fields:
• Adaptability for water depth
• Easy to install
• Flexibility to take crude oil directly to the refining centre of choice.
• Do not require a local pipeline infrastructure to export oil
• Can be a conversion of an oil tanker or can be a vessel built specially for the
application.
• Reduced upfront investment
• Earlier cash flow because they are faster to develop than fixed platforms
Kikeh
• In areas of the world subject to cyclones (northwestern Australia) or icebergs
Source: PraGlobal
(Canada), some FPSOs are able to release their mooring/riser turret and steam
away to safety in an emergency
• Retained value because they can be relocated to other fields
• Abandonment costs are less than for fixed platforms

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 FPSO/FSO Preferred Choice of FPU

The graphs below illustrates that FPSOs are by far the preferred choice among
the different floating production concepts. 143 FPSOs are currently working or in
yard, preparing for re-deployment.

FPSO - a preferred choice for floating production solutions

Distribution producing FPUs

Kikeh

Source: PraGlobal

Source: Pareto Research, ODS Petrodata

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 FPSO/FSO Floaters in Malaysia

FPSO/FSO's in operation in Malaysia

FPSO/FSO Vessel Name Field Operator FPSO/FSO Owner

FPSO Perintis PCSB M3nergy
FPSO Armada Perkasa PCSB Bumi Armada
FPSO Bunga Kertas PCSB MISC
FPSO Kikeh Murphy MISC/ SBM
FSO Esso Mercia Exxon/ PCSB SBM
FSO Dulang PCSB MISC
FSO Ross Sea Talisman Tanker Pacific
FSO Cendor Petrofac MISC
FSO Abu PCSB MISC
FSO Angsi Talisman MISC
FSO Orkid Talisman MISC
FSO West Patricia Murphy Tanker Pacific
Kikeh Carigali/Hess (M3nergy
FSO Cakarawanla* Carigali/Hess Operator)
Source: PraGlobal
FSO Ratu Songkhla* CPOC M3nergy

 FPSO Armada Perkasa and FSO Esso Mercia Total of 4 FPSO and 10 FSO (2 in Malaysia
are no longer in Operation Thailand JDA)

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FPSO/FSO Specification - FPSO

• Owner :X
• Operator :X
• Year built / converted : 1984 / 1999
• Conversion Shipyard : MSE Sdn Bhd, Malaysia (Now MMHE)
• Classification Society : ABS
• Tonnage : 94,000 DWT
• Storage capacity : 650,000 bbls
• Production capacity : 35,000 bopd
• Gas Compression : 100 MMscfd
• Accommodation : 75 men
• Mooring System : Ext. turret, 6 anchor legs
• Production/ Gas Export/ WI/ Gas Lift : 1x16” & 2x14” / 1x12” / 1x6” / 1x4”
• Product : Crude oil (waxy, about 20%)

Kikeh

Source: PraGlobal

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FPSO/FSO Operations and Maintenance Overview

Kikeh

Source: PraGlobal

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FPSO/FSO Who are the Stake Holders

Client
(Petronas
Carigali)
Host
Government Class

Insurers and Public

Underwriters

Suppliers and Shareholders

Sub-
Kikeh
Contractors
Source: PraGlobal

Employees
Financiers

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 FPSO/FSO Issues and Challenges for all FPSO

• Environmental concerns, political stability, access, remoteness

and, of course, the price and price stability of the produced
gas/liquids.
• Conscious targeting of projects. Contracting T&C.
• Appreciation of customer & host country perspectives
• Corporate culture; right blend of shipping & offshore
• Continuous HSE attention
• Up-time focus. Reliability and Asset Integrity. Legacy equipment
• “On time within budget” construction/conversion/redeployment
Kikeh
• Financial strength
Source: PraGlobal

• Availability of crude oil tankers for fast-track conversions

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FPSO/FSO Issues and Challenges for all FPSO

• Equipment Standardisation
• Changing from periodic survey cycle to a
5 year continuous survey cycle.
• Legacy equipment spares. Long lead
items
• Planned maintenance schedules
• Materials Selection
• Riser and Mooring Tensioning Systems
• Hull Coating
Kikeh
• Offshore Loading Operability
Source: PraGlobal
• Contractor Bid Evaluation
• Ageing facility
• Ballast tank

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15
FPSO/FSO Key Issues – Own Experience

• Poor Operational Efficiency & equipment selection (failures, poor

performance)
• cost driven choices –Owner cost challenge, operability not the
driver
• misapplication of some major equipment (Crude separators)
• unproven technology (control system, PCHE heat exchangers)
• Ship-building standards versus FPSO requirements
• Layout
• Quality
• Long term operability/repair philosophy and strategy
• Accessibility for maintenance – corrosion and overhauling
• Process/Marine interface
• deck movement/flexing. Difference in static and dynamic conditions
of operation – Minox tower, TEG contact level and separator level.
• Legacy equipment support services
Kikeh
• Package approach
Source: PraGlobal • lack of integration - ESD, F&G not common
• many suppliers – differing standards and integration issues
• different standards/philosophies
• Distinguish between FPSO (offshore) and marine practices & standards
• HSE awareness and appreciation

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FPSO/FSO Key Issues – Grouping of “3P “

• Retention
People • Competency
• Safety Culture

• Uptime & Performance Assurance

Plant • Interfacing with legacy equipment
• Integrity issues. Ageing facility.

Kikeh
• Standards
Source: PraGlobal
Procedure • Systems
• Manuals

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FPSO/FSO Key Issues - Major Works

• Equipment failure & repairs

• Heat Exchangers, Gas Turbines, Flare Header, Turret
Swivel, Fire & Gas system, Boilers
• Export Gas dehydration unit failure to meet Dew Point
requirement
• Crude carry-over to the gas compression
• Failure of the PCHE compact heat exchanger for the gas
cooler
• Health, Safety & Environment incidents
• Upgrades
Kikeh • Dehydration, Compression, DCS, Materials Handling,
Source: PraGlobal Insulation, Vibration/Noise reduction
• Ballast tank repair – In-situ and online steel renewals

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FPSO/FSO Issues & Challenges for the Ballast Tank Steel Renewal

Owner Insurance
• Financial ability • Coverage Customer
• Corporate policy • Cost • Value for money?
• Reporting
• Field risk
Class •Monitoring
• Mitigation
• Verify action plan
• Resources
•Approval

Technical
• Design basis
• R&D
•Functional
Offshore • Availability
• Resources
• Acts of God !
• Tank management QHSE
Logistics
• Boat schedules
Operator • Availability
• Bring in early • Customs
Kikeh • HSE
• Budget
• Uptime
Source: PraGlobal
Sub
•Resources Contractors
Contract T&C Schedule • Project packaging
• Do not close eyes • Credibility • Capabilities
• Include legal • Who’s float • Capacities
from day 1 • Engineering • Changes
• Manage • Procurement
• Construction
• Installation

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FPSO/FSO Ballast Tank Repair and Steel Renewal

Igloo / Deck
Habitat Cutting

Marking in Tank

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20
 FPSO/FSO Ballast Tank Repair and Steel Renewal

Hotwork Confined space

Bulkhead holed

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21
FPSO/FSO Issues & Challenges – Pay close attention

Leadership / Roles & Responsibility.

 Hazard/risk evaluation processes.
 Management of Change & Maintenance Systems.
 Protective Systems/Safety Critical Equipment
 Strategy/Processes /Plans linked to AIM Strategy.
 Competency of staff and status of procedures.
 Effective incident investigation/emergency response
Performance management & assurance
Processes and ageing facility (converted FSO/FPSO)
Kikeh
Legacy equipment to match new production modules
Source: PraGlobal
Hybrid equipment needs hybrid personnel
Different cultures between Marine and Offshore disciplines

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22
FPSO/FSO Main Lesson Learnt – What is Needed?

EFFECTIVE MAINTENANCE &

INSPECTION MANAGEMENT
SYSTEM
• Can be an optimum mix of preventive, predictive and corrective maintenance. The
execution of the inspection & maintenance plan will be prioritised, resourced and
performed to the required standard of safety and environmental attention.
• The efficiency of the maintenance plan, maintenance strategy and performance of
maintenance tasks will be measured by means of production and operational
parameters.

This is currently developed further to be

ASSET INTEGRITY MANAGEMENT

SYSTEM (AIMS)
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23
 FPSO/FSO Asset Integrity Management System (AIMS)

Management
Strategy

Survey and
Implement Inspection
Changes Plan
ASSET
INTEGRITY
MANAGEMENT
SYSTEM
Kikeh Survey and
Asset Inspection
Source: PraGlobal Integrity Execution
Examination

Anomaly
Assessment

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24
FPSO/FSO Outlook – Malaysian Market

• 106 marginal fields with a total of 580 million barrels of

oil equivalent
• Petronas plans to develop 25%, or 27, of the total
marginal fields
• Marginal field will be group together in a cluster of 4-5
fields each for development
• Development costs were high as much as USD800
Kikeh

Source: PraGlobal

million.
• Increase in Deep Water exploration

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Malaysia Floaters Out look 2011 and Beyond

Deepwater Projects in Malaysia

Water
Estimated Reserves Depth

Kikeh 400 mboe 1,300

Gemusut 500 mboe 1,200

Malikai 100 mboe 480

Kebangan 2 tscf 200

Jangas 80 mboe 1000

Ubah
Crest 200 mboe 1000

Pisangan 55 mboe 1000

Kamansu 2 tscf 1000

Deep-water oil and gas fields contributes to

Kikeh
 More than 163 oil & 216 gas fields have been
4% PraGlobal
Source: of the Malaysia’s hydrocarbon production discovered – Only a fraction of those are
producing
22 Deepwater/ Ultra Deepwater blocks

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FPSO/FSO Outlook – Malaysian Market

Marginal Fields
Kikeh

Deepwater Fields
Source: PraGlobal

Isolated Fields with no existing

pipeline infrastructure

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Concluding Remarks Opportunities in the Malaysian FPSO Market

1. Industry’s move into deepwater areas

2. Exploitation of marginal fields
3. Growing emphasis on “fast track” and/or phased
development
4. Continuing expansion in the use of subsea production
technology
Kikeh

It is still a “Sunrise Industry”

Source: PraGlobal

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GlobalMariner Offshore Services Sdn Bhd
Capt. Hisham Hashim
hisham@gmos.com.my

A-16-9 Menara UOA Bangsar

Jalan Kemuja, Bangsar
Tel: +603- 2282-5280 59200 Kuala Lumpur Malaysia
Fax: +603- 2282-5258