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Lumina House
FPSO Redeployment
By Mark Evans
Lumina House
Agenda
Overview
Example (success)
Current market opportunity
Economic advantage
Risks and lessons learned specific to redeployments
Example (risks)
Summary of Success factors
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Opening statement
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Overview
FPSO relocation statistics 6% multiple relocations (11) 14% one relocation (27)
Example FPSO’s redeployments Teekay Petrojarl 1 (9 times) BW Crystal Sea (3 times) SBM FPSO II (3 times) Bluewater Munin (1 time) Armada Claire (1 time)
6%
14%
80%
Relocated once
Relocated multipletimes
First deployment
192 FPSOs worldwide
An redeployment strategy has the potential to deliver significant cost and schedule savings
Although there are significant risks attached to a redeployment strategy, they are identifiable, manageable and tolerable.
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Specification Value
Delivery 1986
Storage 180,000 bbls
Oil production 30,000 bopd
Gas handling 8-9 mmscfd
Riser slots 9
Fields
10 deployments
Norway: Oseberg, Troll, Blenheim, GlitneUK: Lyell, Fulmar, Balder, Fife/Fergus/Flora and Angus, Kyle, HudsonBrazil: Altana (Santos Basin) (Due Q1 2017)
Success Operated under different regulatory regimes and for different operatorsVariety of different field conditionsAverage production regularly between 96 to 99%
Reason Facility flexibility – testing/early production/permanent productionOwned by Teekay for most of lifeExperienced FPSO operators
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Example (success) – Teekay Petrojarl 1
Courtesy of Teekay
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Current market opportunity
Current market conditions are putting downwards pressure on prices in the industry.
Residual values not much more than scrap
Highly competitive redeployment market
51 out of a global fleet of 278 FPS are available
25 are FPSOs (record number)
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Economic advantage
Example FPSO Conversion• Suezmax (290m)
• 1million bbls storage
• Internal turret (8 slots)
• 100,000 bopd
• 50,000 bwpd
• 200 mmscfd
• Harsh environment
• Safety case regime
• 20 years field life
Outcome
• RFSU 22 months (post FID)
• US$1billion
Example Redeployment• Dependant fit of candidate FPSO & execution
• 10 to 25 years old and well maintained
• Residual value: US$50million – US$250million
Overall schedule
• RFSU 12 to 18 months (post FID)
CAPEX saving range per area
• Varied level of reuse / refurbishment / upgrade
• Hull: US$15million - US$100million
• Turret: US$100million - US$150million
• Topsides: US$50million - US$300million
• Total: US$15million - US$550million
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Minimise rework and investment
The FPSO has to fit the field and the field fit the FPSO
Easiest (best fit) = Same region, contractors and client specifications
Hardest = Different region, new contractors and new very prescriptive client requirements
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Risks and lessons learned specific to redeployments
Technical
Topsides rarely match field Gas compression, gas treatment, water injection, power, pressure, temperature, CO2, H2S
A multi-discipline integrated topsides review
Simulation to determine compatibility and debottlenecking opportunities
Address metallurgy issues and resistance to CO2 and H2S
Turret compatibility (subsea interface) Slot size/number, service, flow assurance, flowrate, pressure, temperature, CO2, H2S
Integrate with topsides review and include vendor support
Metocean / environment changes Assess gaps and economic impact in FPSO screening phase
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Risks and lessons learned specific to redeployments
Technical
Understanding true condition & legacy issues Accurately determine condition before selection - full condition assessment
Review of preservation regime, operating and maintenance records
Work with a contractor who has operated/worked on the unit before
Allowance for surprises
Regulatory regime differences Confirm gaps can be cost effectively managed before selection
Specification too prescriptive or not robust Prescriptive specification drives up cost, basis not robust leads to changes
Gather information early from contractors/seller to see what will work
Flexibility for contractor (non-prescriptive requirements / consider operator light touch)
Allowance for compromise
Minimising change (focus on front end engineering)
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Risks and lessons learned specific to redeployments
Commercial
Procurement strategy FPSO availability and competition from others to buy
Consider how candidates fit into your execution strategy and timeline
Firm up a reasonable ‘option to purchase’ price with one or more of the candidates
Contracting strategy Knowledge of asset and non-incentivised contractors
Previous owner risk profiles (contractor / oil company)
Lease with purchase option redeployment risk is managed by most suited stakeholder
Consider risk sharing contracts
Schedule
Layup and decommissioning costs
Maintenance cost of old equipment
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Example (risks) – EnQuest Producer
Specification Value
FPSO Enquest Producer (EnQuest)used to be Uisge Gorm
Redeployment Alma and Galia (Enquest)
Year 2015
Schedule impact >18 months
Cost impact >US$200million
Reason Scope of upgrade and specification of the FPSO changed by Enquest during the refit period, to extend life of field, optimise operating costs & enable additional development
Courtesy of EnQuest
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Example (risks) – BW Athena
Specification Value
FPSO BW Athena (BW Offshore)used to be BW Carmen
Redeployment Athena, UK (Ithaca Energy)
Year 2012
Schedule impact Approx. 6 months
Cost impact Not known
Reason Change in regulatory requirements during upgrade resulting in scope growth
Courtesy of BW Offshore
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Success factors
Successful FPSO redeployment
Feasible cost and schedule savings
How you get there
Record number of idle FPSO’s
Find the best match FPSO
Fully understand the condition
Be flexible / open to compromise
Adequate front end design
Robust functional specifications that are not too prescriptive
Minimise change (cultural)
Consider maintenance and layup requirements
Set realistic schedules
Risk sharing
Independent reviews
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Questions?
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