Nov. 1, 2006
A significant number of floating production contracts and arrangements have been settled recently.

David Paganie • Houston

Floating production

A significant number of floating production contracts and arrangements have been settled recently. Keppel, Prosafe, Petrojarl Production AS, Ezra Holdings, and BW Offshore, all entered into various types of FPSO agreements.

Keppel clinched FPSO conversion contracts with Monaco-based SBM and Bermuda-based Frontline FPSO Ltd.

Keppel Shipyard will convert for SBM the 310,000-dwt VLCCLitiopa into FPSO Saxi, which will have production capacity for 100,000 b/d of oil and storage for 2 MMbbl of oil.

When completed in early 2008, the vessel will be leased to ExxonMobil for the Kizomba C development, offshore Angola.

Keppel Shipyard also will carry out the conversion of a 112,000-dwt shuttle tanker,Front Puffin, into an FPSO for Frontline. The vessel will be equipped to handle 40,000 b/d of oil and store 720,000 bbl of oil. It will be leased to AED Oil Ltd. for the Puffin field in Bonaparte basin, Australia.

Prosafe was issued a letter of intent by an undisclosed company for the conversion and operation of an FPSO for a deepwater development. Should the LOI result in a contract, it would have a firm period of seven years plus options to extend up to 15 years. The estimated contract value of the firm period is $332 million.

Petrojarl Production AS has secured a contract with Petrobras to supply an FPSO for the Siri field in the Campos basin, offshore Brazil. The contract will be assigned to Teekay Petrojarl Offshore LP.

The contract is for a two-year firm period, with options to extend up to an additional year. The FPSO is scheduled to begin production on Siri in 1Q08. The vessel will be available for redeployment after completion of the contract.

Ezra clinched a $266-million contract for supply of an FPSO for an initial four-year term in Southeast Asia. The contract comes with an option to extend for an additional three years. The tanker MTKitty Knutsen will be converted to handle 150 MMcf/d of gas and 10,000 b/d of condensate, with 700,000 bbl of liquid storage capacity. The charter is expected to begin in the first half of 2008. Sources indicate that the FPSO will be deployed on the Arthit field in the Gulf of Thailand for PTT Exploration & Production Co. Ltd.

BW Offshore picked up contract to lease and operate its FPSOBW Endeavor, to be renamed, BW Peace, on the Bilabri field in OML 122 offshore Nigeria. The $259-million contract, let by Peak Petroleum and Equator Exploration, includes a fixed period of three years with an option to extend an additional seven years. The FPSO is expected to begin operations on the field in the second half of 2007.

SBM secured a lease contract with Murphy E&P for the provision of a newbuild semi for installation in 1,800 m of water on the Thunder Hawk field in Mississippi Canyon block 736. The facility, based on Atlantia’s DeepDraft semi design, will come equipped to handle 60,000 b/d of oil and 70 MMcf/d of gas. It also will have the capability to expand to accommodate additional production from satellite discoveries or third-party tiebacks. Installation of the semi is scheduled for late 2008.

Aker Kvaerner signed a memorandum of understanding with Statoil for work related to delivery of a semisubmersible production facility. The semi will be deployed on the Gjoa field offshore Norway. Aker’s scope of work includes detail design of the unit’s topside and hull, procurement, construction and hook-up of the topside, and facility integration.

TheGjoa semi’s topside will measure 110 m long and 85 m wide and weigh around 20,000 metric tons. The hull will weigh approximately 14,200 metric tons. The mated facility is scheduled to be towed to Gjoa in 2010.

In other floating production news, Gulf Marine Fabricators has received a formal LOI from Bluewater Industries, through ATP Oil & Gas, to fabricate and load-out a MinDOC 3 hull. Contract terms are still under negotiation.

The MinDOC is based on a deepwater floating drilling and production concept. The fabrication, assembly, and load-out of the hull will be performed at Gulf Marine’s facility in south Texas. Work is expected to begin in 1Q07, with delivery anticipated in 2Q08.

SBM secured a FEED contract with Talisman Energy Norge AS for a MOPU with storage capacity. The facility will be installed on the Talisman-operated Yme field on PL316 in the Norwegian sector of the North Sea. The MOPU system will comprise a production jackup installed on a subsea storage tank.

A final investment decision and submission of a PDO (Plan for Development and Operation) for redevelopment of Yme is expected in late 2006 or early 2007.

In the event the PDO is granted, the parties intend to enter into a contract for lease of the MOPU for an initial five-year period. First production is expected in autumn 2008.

Rig construction

ENSCO has entered into an agreement with Keppel FELS to construct a semisubmersible rig to be namedENSCO 8502. The total project cost is expected to be approximately $385 million. Delivery is anticipated in late 4Q09.

The semi is the company’s third in its 8500 series, which are capable of drilling in up to 8,500 ft of water, upgradeable to 10,000 ft. The company has elected to proceed with construction of the semi in advance of securing a firm drilling commitment.

Standard Drilling ASA has exercised its option with Labroy Offshore Ltd. to deliver two jackups. The Gusto MSC CJ-46-X100D-designed rigs are expected to be delivered in 2009.

Meanwhile, Pan-United Marine has won a contract from Frontier Drilling Pte Ltd. to re-activate the drillship,Frontier Discoverer. Pan-United will fabricate and install a new sponson tank, install a new accommodation block, and refurbish the rig’s drilling equipment to ice-class requirements. The S$25-million contract is scheduled for completion by 2Q07.

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Superior Offshore International enters the deepwater small diameter tieback market with construction of a new vessel. The company has awarded Netherlands-based Merwede Shipyards a contract for a newbuild 430-ft by 72-ft DP-3 subsea construction vessel. Anticipated delivery is in June 2008. The ship will have accommodations for 158 people and will be constructed with both a diving moonpool and working moonpool. Initially designed for a 12-man, 1,000-ft saturation diving system with a hyperbaric lifeboat, it will have the capability to support an additional 24-man dual bell saturation system when required. Crane capacity consists of a 160-ton crane, 140-ton heave compensated crane capable of lowering a 70-ton load to 6,000 ft, and a 24-ton man riding certified crane. The ship also will have a 300-ton heave compensated A+R winch capable of working in depths of up to 10,000 ft.