10 October 2013, News Wires – More Southeast Asian companies are moving to the floating production systems market, especially for floating production, storage and offloading (FPSO) vessels, as they grow their businesses. Traditionally, the companies established their businesses by operating as service providers to the upstream petroleum sector, offering services in areas such as the supply of offshore support vessels or offshore fabrication. Most of them have since widened their services to grab a larger slice of the lucrative upstream market, including the supply of FPSOs.
A few petroleum services firms in Malaysia and Singapore have made a gradual entry to the global FPSO market, where they will compete with the likes of BW Offshore, SBM Offshore N.V. and MODEC Inc. In recent years, industry heavyweights such as BW, SBM and MODEC have shifted their focus to more profitable deepwater projects in West Africa and Brazil.
FPSO: The Most Common Floating Production System
FPSO is the most common floating production system (FPS) used in offshore petroleum development. Other types of FPSs are tension leg platforms, spars and semisubmersible production platforms. An FPSO has multiple functions and can receive fluids from a subsea reservoir, process, store and offload. FPSOs, mostly ship-shaped, are “anchored” by a turret.
Field operators find it advantageous to deploy FPSOs as they:
are faster to develop compared to fixed platforms
require less upfront investments
have option to deploy facility to other fields
expects abandonment costs to be below those for fixed platforms
However, there are some drawbacks facing companies that select FPSOs as FPS, such as:
subsea tiebacks creating higher well maintenance costs
complexity of the turret/swivel machinery meaning that any failure can become a major problem
cost and delay may be surprising when converting tankers to FPSOs
redeployment of an FPSO may not be as easy as it seems
Interest in FPSOs is rising as offshore production, now accounting for about 30 percent of global petroleum production, is projected to track the anticipated gains in world’s energy consumption, while advancement in technology may facilitate hydrocarbons extraction in more challenging deepwater environments. Capital expenditure on FPS is forecast to reach $91 billion between 2013 and 2017, with 80 percent going to FPSOs, Douglas-Westwood said in a Nov. 27, 2012 report on “Floating Production Expenditure Set to Double.”
The Global Reach of FPSOs
As hydrocarbon production shifts from shores to deepwater, more FPSOs have been deployed. There are 153 FPSOs operating worldwide, 84 percent more than the 83 deployed in 2003, data presented by Jim McCaul, managing director of Washington D.C.-based International Maritime Associates, Inc. (IMA) at the Emerging FPSO Forum Sept. 25 showed. The statistics excluded 13 FPSOs currently without a field contract, a spill recovery FPSO and 4 small FPSOs used for well test on the Mexico side of the Gulf of Mexico.