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Local content issue could affect strong floater market

Offshore staff

ANTWERP, Belgium – FSO provider Euronav says big challenges lay ahead for the floating production sector.

Fields in deepwater and remote regions require ever-more advanced technologies, with FSO and FPSO demand driven largely by countries in Latin America and West Africa.

Local content requirements in those areas can be strict, with construction companies under increasingly pressure to create employment opportunities for the local workforce. Over the short-to-medium term, Euronav says, this may impact capital cost and timescales for FSO and FPSO developments.

Despite these factors, the floating platform market is set to remain one of the strongest offshore sectors through to the end of the decade. Plus, with an increasing amount of floating production investment being directed away from the traditional Latin America and West Africa markets, Euronav adds, there could be an interesting change in dynamics within the sector.

The company is a participant in TI Africa, owner of FSO Africa, which was granted a new five-year contract by Maersk Oil to continue supporting operations on the Al Shaheen field offshore Qatar.

The contract, which started last October, includes an option for a one- or two-year extension. It also extends to Maersk Oil use of the vessel’s full capacity and functionality against an increase of the daily hire earned in each contract year, equal to the daily hire rate currently earned on the same field by sister vessel FSO Asia.

3/22/2013

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