Most of the expected increase in production will come from deep and ultra-deep water. As a result, companies involved in the floating production business – and specifically shipshape FPSO vessels – are in an increasingly healthy position.

The economics of an FPSO unit are pretty positive. With deepwater projects having a development breakeven cost of anywhere between US $30/bbl and $80/bbl, even the latest large Generation 3 FPSO vessel (which comes complete with facilities including complex topsides of at least 20,000 metric tons [mt], plus considerable gas processing and CO2 recovery and reinjection capabilities) has production costs that come out at below $5/bbl, according to SBM Offshore. Not bad with an oil price of more than $100/bbl.

Not that Generation 2 FPSO vessels are exactly low-tech. SBM is supplying one to Shell for its Stones development in the US Gulf of Mexico. The unit will be the world’s deepest, moored in 2,896 m (9,501 ft) of water, and will feature technological highlights including the first use of steel catenary risers in a lazy-wave configuration deployed from an FPSO vessel. SBM will equip it with its proprietary buoyant turret mooring system to make the Stones FPSO unit disconnectable if a hurricane comes along.

The Generation 2 floater is, however, definitely less complex in terms of topsides than its Generation 3 sisters (like two $1.8 billion vessels to be supplied by SBM to Petrobras for its Lula field). The Stones topsides will weigh 7,000 mt and have an oil-processing capacity of 60,000 b/d with no water or gas injection.

SBM CEO Bruno Chabas said in the company’s latest results webcast that there are 54 FPSO vessels up for grabs over the course of the next three years, including 18 in South America, seven in North America, 17 in Africa, eight in Asia, and four in other areas. The company already has won eight contracts so far this year, and SBM is focusing on 20 upcoming projects to obtain its share.

The prize is growing. According to analyst International Maritime Associates, there are 241 floater projects in the bidding or planning stage. With FPSO vessels accounting for 61% of the 269 units already in service or available, they are likely to make up more than half of the new floaters in the pipeline.

This illustrates the inherent advantage that FPSO units have over other alternatives for certain projects: their sheer applicability to a wide range of developments, independent of water depth. This flexibility is crucial when operators weigh their field options, especially with the advantages of being able to sail off when required.

Here’s a good example. Back in 1993 my first offshore press trip (as the editor of Hart Energy’s Euroil magazine) was to Kerr-McGee’s Gryphon oil field in the UK North Sea. It produced successfully and is now the longest-serving permanently moored FPSO unit in Europe.

A storm in 2011 saw the field’s infrastructure suffer damage, so the FPSO vessel sailed four months later to Rotterdam, the Netherlands, for repairs and an upgrade. It came back in August 2012 to be reconnected to substantially upgraded subsea infrastructure and began producing again at the end of May this year. It is expected by today’s operator, Maersk Oil, to produce 20,000 boe/d for the next decade.

It’s a simple example but illustrates how a flexible production solution can allow a field-threatening incident to become a whole new opportunity.

Offshore