Deeper water opportunities force contractors into unknown territory
David Paganie
ODS-Petrodata
The worldwide offshore construction industry is in transition. As more deepwater fields are discovered, development plans become more complex, incorporating various floating production solutions as well as subsea systems.
Growth regions for new floating production installations include West Africa, the US Gulf of Mexico, Southeast Asia, and Latin America. For subsea production, West Africa, the North Sea, Latin America, and the GoM are hot-spot regions.
This year's offshore field development international survey finds the following units in the planning or construction phases:
- 68 floating production/and or storage units
- 293 fixed platforms (two-pile and greater)
- 155 subsea projects.
Click here to view the 2003 Global field development survey in pdf.
Contractors seek niche
Contractors are searching for identities in today's uncertain, unprofitable construction market. Some contractors intend to restructure their organizations to capture a niche in the market, which will result in marine asset sales.
J. Ray McDermott intends to deal with negative cash flows through the sales of nonstrategic assets, including certain marine vessels.
Stolt Offshore is seeking to exit various nonstrategic market segments. The company will sell certain assets and businesses that no longer fit Stolt's core activity.
Horizon Offshore attributes its poor performance and low vessel utilization in 2Q 2003 to competitive market conditions in the GoM and project schedule slippage in both the GoM and off West Africa.
Torch Offshore also returned disappointing 2Q 2003 results. The company, however, continues to develop a niche expertise in deepwater pipelay. During 2Q 2003, Torch took delivery of the Midnight Wrangler, a dynamically positioned construction/pipelay vessel that mobilized for its first commitment during 3Q 2003.
Floating production
In the past, FPSOs and semisubmersibles were the optimal field development choices for deepwater. Now other floating production solutions are available, including TLPs and spars. This, coupled with the fact that exploration activities are pushing into deeper waters, bodes well for engineering, construction, and installation contractors involved in the market segment, as well as construction vessel owners and operators. Vessel redeployment, however, continues to be a lingering issue that needs to be addressed further.
Worldwide, 18 floating production units were installed in 2000, followed by 16 in 2001, and 18 in 2002; 27 units are slated for installation by the end of 2003. Twenty-three units are planned for 2004, and 54 units are scheduled for installation in 2005 and beyond.
The Midnight Wrangler mobilized for its first commitment in 3Q 2003.
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Decommissioning growth spurt
Global Industries is taking advantage of the sudden growth spurt in decommissioning opportunities in the GoM. The company says of the 6,240 structures installed in the GoM, 2,206 have been removed, while the remaining 4,034 platforms average 20 years in age. Survey results indicate that 75 platforms (two-pile and greater) were removed in 2001, followed by 87 in 2002; 122 platforms are planned for removal by the end of 2003.
In the Norwegian sector of the North Sea, Total has received approval for the removal and on-site deployment of five structures and other associated infrastructure on its Frigg field in block 25/1a. The field is expected to cease production in 2004, followed by start of removal work in the second half of 2005.
Decommissioning opportunities are expec-ted in Southeast Asia on the Statoil-operated Lufeng field in block 22-1 offshore China. Decommissioning of the field's Munin FPSO and associated subsea wells and pipelines will require shut-in the field in February 2004.
Platform construction has been steadily declining since the mid 1990s as shallow water provinces mature. According to survey results, 76 platforms are planned for installation in the Gulf of Mexico, 71 in Southeast Asia, and 34 are planned or under construction in the Middle East.
While Latin America has 15 platforms slated for installation, the region is expected to provide platform construction and installation contractors significant opportunities over the next two to three years. Petroléos Mexicanos has initiated a tendering process for more than 40 construction and installation contracts related to new offshore oil drilling and production platforms.
Off West Africa, ChevronTexaco will install a 42-slot compliant tower equipped with full drilling, production, compression, and accommodation facilities on its Benguela/Belize/ Tomboco fields in block 14 offshore Angola. The facility will process hydrocarbons from at least 14 subsea wells.
BP has begun construction on a fixed quarters/production platform for the Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea. The platform is based on the Technip-Coflexip's proprietary TPG-500 self-installing jackup design.
Subsea developments – deeper trend
Subsea production systems continue to be an integral part of operators' field development plans. Based on survey results, 70 subsea trees were installed in 2000, followed by 195 in 2001 and 198 in 2002. By the end of 2003, there will be 388 installed trees, followed by 378 installations in 2004 and 284 tree installations in 2005 and beyond. Furthermore, 45% of the trees planned for installation this year will occur in 1,500 ft of water or greater, 67% of the trees slated for installation in 2004 will be in water depths of 1,500 ft or more, and 72% of trees planned for installation in 2005 and beyond will occur in 1,500 ft of water or greater.
