by Dr Roger Knight. Data Manager Infield Systems.

Steep learning curve for FPSO use, but knowledge has value

ONLY three or four years ago, FPSOs seemed to be the development type of choice for many operators, cheap, clean, efficient and with no nasty decommissioning costs when the field they were operating on was no longer economic to produce, writes Dr Roger Knight.

They could sail away to begin life anew on another field, saving immense up-front Capex costs second time around.

Unfortunately for many companies taking this road, practice has not kept in-step with theory and massive cost overruns have been the order of the day leading to a liquidity scissors crisis as the price of oil has fallen and costs have gone up.

Similar look-alike development scenarios, by the same company, have not always paid equal dividends.

For example Amerada Hess's experiences at Fife/Fergus compared with Durward/Dauntless and Statoil's Lufeng project against its Connemara prospect have varied greatly.

The learning curve has been steep indeed.

By now a great deal of knowledge of FPSO operations, both in the construction and production phases, has been gained and it is a good time to take stock.

A comparison of Tables 1 and 2, (please contact Infield) contrasting the development scenarios planned for fields under consideration over the next five years for shallow, (in this case less than 300 m of water) and deepwater fields, (300m or deeper) is instructive.

It shows that fixed platform developments still predominate in company plans, if the waters are shallow, except for the Petronius and Virgo platforms in the deep Gulf of Mexico.

Subsea satellite tiebacks are, however, the preferred solution in deeper waters, even if, as in the Malampaya project in the Philippines, the field's host platform is placed in much shallower water.

or fields where a floating development option is under consideration, only 5% of the shallow water market is involved whereas about 40% of deepwater developments could use a floater of one type or another.

Of these floating options, about 60% are slated to revolve around FPSOs, while the others involve the use of semis, TLPs or Spars/deep draft caisson vessels. Obviously the big question mark hanging over all these potential developments is the price of oil. A prolonged period of low prices will curtail this list of developments considerably, whereas a sustained, and sustainable rise will see most of these projects getting the go-ahead.

To be precise as to numbers is very difficult at this stage, but at $10-$12 per barrel we would expect about 60% of these fields to be considered economic.

At $14-$16 this figure would rise to 70% and at $18-$20 per barrel it would hit 80% or more. Not every FPSO will be a new FPSO, whether a newbuild or a conversion of an existing hull.

Many will be shifted from one field to another. In some cases, such as the US Gulf of Mexico, FPSOs may not be the preferred option and their place will be taken by a TLP or Spar-type structure, or yet another subsea tie-back, but the figures do place an upper limit on what we expect to see over the next five years.

Constraints on using FPSOs in the past have rested mainly on the size of the topsides that can be usefully carried. This has led, in some cases (Mobil?s Zafiro project off Equatorial Guinea), to a progressive upgrading of the load carried on the hull as more processing and production equipment was required.

This becomes particularly critical when large amounts of associated gas are present. In the past, it could safely be said that FPSOs and large volume gas production did not mix well, and in fact one of the major constraints on developing the deepwater Angolan oil fields of Kuito and Girassol has been the issue of what to do with the gas. The answer arrived at is not to flare the gas, but to reinject it. Whether in practice the rate of gas processing and reinjection will be great enough to allow a suitably high production of fluids remains to be seen.

One thing is for sure, the FPSOs of the future will be bigger, more sophisticated and incoporate innovative designs in areas such the efficient integrating of topsides and marine functions in one hull, rather than the simple converted ex-tankers of the past.

LLP Limited 1999

For more information please contact Infield