Transcript Economic Issues for FPSOs in the Gulf of Mexico: What's

Report out from FPSO Global Workshop
24-25 September, 2002-Houston
by Johan Wichers – MARIN USA Inc.
FPSO Research Forum
October 16, 2002
Santiago de Compostella, Spain
Who organized the FPSO-Global-Workshop
and Why?
Offshore Operators’ Committee
 API Shuttle Vessel Task Force
 DeepStar
 FPSO Research Forum
 MMS
 USCG
 SPE

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Who organized the FPSO-Global-Workshop
and Why?
In deepwater regions of the GoM large oil
fields are present. FPSOs seem to be the
economic solution
To “identify and clear” potential roadblocks
for FPSOs to be installed in the deepwater
part of the GoM
Discussions with all players: the oil
companies, operators, contractors,
research institutes, government, class
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by MMS
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Who attended FPSO Global
Workshop
IBC’s FPS USA2002
17-19 June
IBC’s OPT USA2002 FPSO Global Workshop
16-17 September
24-25 September
Oil company people
2
2
43
Other categories
44
44
112
-
-
10
Other speakers
21
36
23
Total in room
67
72
188
46
46
155
1200
1200
525
Oil company speakers
Estimated paid
attendees
Ticker price US $
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The 2 days program
DAY-ONE
1)The Latest in the GoM Regulatory Framework for FPSOs,
What It Really Means Today
2)Typical FPSO Operators’ Requirements Outside GoM

Oil Co. Owner & User of FPSOs

Contractor Owner of FPSOs
3)Typical Operators’ Requirements for FPSOs for GoM
DAY-TWO
4)Town Hall Meeting: Brief Presentations on Future Needs by Attendees
5)Where do the shuttle vessels come from? What requirements apply? How
can they compete with established pipeline networks?
6)Time for the Practical Stuff: How do we now obtain one of these FPSOs
for GoM?
7) Conclusions from Industry Leaders in Sponsoring Organizations
Or in more detail:
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DAY-ONE - morning
1)The Latest in the GoM Regulatory Framework for
FPSOs,
What It Really Means Today
Jim Grant – MMS: Regulatory review for FPSOs in the GoM
Mark Prescott – USCG: FPSOs in the GoM? Are we there yet?
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DAY-ONE - morning
2)Typical FPSO Operators’ Requirements Outside GoM

Oil Co. Owner & User of FPSOs
Dave Edwards- Shell: Succesful FPSO projects – What does it takes?
Marco Maddalena – Petrobras: Petrobras requirements for FPSOs
Marc Buezlow – ChevronTexaco: CTX has interest in 19 FPSOs and FSOs
Ben Thurmond – BP: FPSO requirements

Contractor Owner of FPSOs
John Lane – Modec: Typical Operator Requirements outside the GoM
John Spittal – PGS: The FPSO role in the GoM
Allan Millmaker – Bluewater: An Owner’s Perspective
Rob Mountjoy – SBMImodco; Experience of SBM
Steve Balint – Shell and Johan Wichers-MARIN: Top Three Issues for FPSO’s
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DAY-ONE -Afternoon
3)Typical Operators’ Requirements for FPSOs for GoM
Rick Meyer & Mitch Winkler - Shell EP Company: Economics Issues for FPSOs in
GoM: What’s Different?
Carl-Arne Carlsen - DNV: Typical Operators’ Performance Expectations for FPSOs
in the GoM
Wanda Parker - Deepstar: FPSO operating and safety requirements
Tricia Clark - API Shuttle Vessel Task Force: Expected Operating Procedures for
FPSO / Shuttle Vessel Operations
Bill Sember-ABS: GoM’s Top Three Issues for FPSOs for GoM
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One of the main conclusions of Day-one:
FPSO Integrity
FPSOs have to stay their life time at location and have to operate
according to the operators expectations – large field - large output
– design failures may lead to large financial losses
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DAY-TWO - morning
4) Town Hall Meeting: Brief Presentations on Future
Needs by Attendees
Ian Whitby-Intec Engineering: Deepwater pipeline or shuttle tanker?
Greg Smith-MMS: Royalties in-kind, economics and transportation
Bill Daughdrill - Ecology&Environment Inc.: Environment & FPSOs-are we
ready?
Arun Duggal – FMC SOFEC : Is DP an option for deepwater FPSOs ?
John Leitch – KBR: Contracting Strategy in GoM
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DAY-TWO - morning
5) Where do the shuttle vessels come from? What
requirements apply?How can they compete with
established pipeline networks?
Skip Ward-OTRC: Comparative Risk Analysis of Deepwater Production Systems
Terry Stock-Callon Petroleum Company: Pipeline Infrastructure, Economics, Risks
for GoM v. Shuttle Tankers
Stein Rynning Navion ASA: Adaptation of Existing North Sea Shuttle Tankers and
Practices to GoM
John Ellis Skaugen PetroTrans Inc. : Commonality of GoM Lightering experience
with GoM shuttling
Chuck Steube, Seahorse Shuttling & Technology LLC : A New Venture in the U.S.
Market
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DAY-TWO -Afternoon
6) Time for the Practical Stuff: How do we now obtain one of these
FPSOs for GoM?
Mark Prescot-USCG: FPSO’s in the GoM, Getting started
Marco Maddalena-Petrobras: Petrobras viewpoint on the process of acquiring
a FPSO
Per Bergstol-Fearnley Offshore: The Commercial Side - lease or buy an FPSO?
Existing or Newbuild?
Rob Mountjoy-SBMImodco: The FPSO Contractor Solution
Jan Wagner-Fluor Corporation: Next generation FPSO: The engineering and
construction contractor solution.
7) Conclusions from Industry Leaders in Sponsoring Organizations
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Some conclusions
1) FPSOs have to stay their life time at location (~20 years)
and have to operate according to the operators
expectations. The fields are much larger than the fields on
the GoM shelf. The through put is large, design failures
may lead to large financial losses
2) Outside and inside the GoM the technical problems are
nearly the same – Loop-eddies, hurricanes, deepwater. We
have typhoons in South-East Asia, we have large current
speeds in South-East Asia (soliton current) and North of
Shetland (Gulfstream return), we have deepwater in West
Africa.
3) The MMS may allow limited re-injection of natural gas
from FPSOs in the Gulf of Mexico as long as the gas is
eventually recovered. For operators, that flexibility may
remove a major stumbling block that had threatened to
delay the entry of FPSOs into the Gulf of Mexico.
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Some conclusions (con’d)
4)
A "serious shift in industry sentiment toward using FPSOs
in the last 12 months" is noticed. However, there is still the
problem of economically building Jones Act-compliant
shuttle tankers to offload from Gulf-based FPSOs. Some
industry sources hoped that waivers might be granted by
US Customs, which enforces the Jones Act, for foreignflagged and foreign-crewed tankers to operate temporarily
in US waters while an entirely new fleet of US-flagged, USbuilt tankers is assembled.
5)
Another option that may be gaining ground to become the
first Gulf FPSO is simply to move an existing FPSO from
elsewhere to the Gulf and have it produce both oil and gas
directly into a pipeline, doing away with the need for
storage or offloading.Shell had considered such a
scenario before it opted for a newbuild semi-submersible
production platform to develop its sprawling deep-water
Na Kika complex in the Gulf.
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Some conclusions (con’d)
6)
Personnel issues continue to press operators. Operational
experience/training/competency issues will be
dramatically different than classic GoM shelf fixed platform
facilities.
7)
Early dialog between developer and agency can provide
valuable benefits and reductions of potential risk to
schedule.
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