From this relatively humble beginning, the FPSO has evolved and progressed to where it now dominates the floating production systems (FPS) landscape. Today, there are 66 FPSOs in service or under construction in almost every major geographical oil producing region in the world, accounting for about 60% of the existing FPS fleet.
The evolution of the FPSO from 1977 to the present can be viewed in three waves:
- From 1977 to 1985 - the early years in which the FPSO was establishing and proving itself as a viable FPS option.
- From 1986 to 1994 - marked an era of rapid technological evolution and an expansion into a wider geographical arena, larger production rates and deeper waters. A total of 20 FPSOs were deployed in this period, or an average of about 2 per year.
- From 1995 to the present - witnessed explosive growth in the number of FPSOs deployed. In these four years, about 44 FPSOs have been installed in every major offshore producing region of the world, except for the US Gulf of Mexico, at an average rate of 8 per year. The UK sector was the most prolific with 12, including two in the very hostile West of Shetlands region, followed by Brazil with 9.
A survey of the FPSO fleet conducted recently (see pullout poster following this article) divides the fleet into units operating, laid-up, in the construction phase, or recently decommissioned. It does not include FPSOs that were decommissioned prior to 1999.
There are a total of 71 FPSOs in the survey, of which 4 are idle and 1 (Tazerka) is listed as decommissioned. Ten of the 71 are in construction with projected completion dates scheduled for 1999 and early 2000.
Areas with the highest concentration of FPSOs are the North Sea, South East Asia, and West Africa. The remainder of the FPSO fleet is located off Brazil, in the South China Sea, Australia, and the Mediterranean Sea. The first FPSO in Canadian waters (Terra Nova) is presently under construction and is scheduled to come onstream later this year.
There are a total of 29 newbuilds and 42 conversions. The trend in the last decade shows an increase in the number of newbuild FPSOs in comparison to conversions. 1999 has been a particularly significant year for newbuilds. Eleven of 16 FPSOs commissioned are newbuilds. In comparison, for example, the ratio of newbuild FPSOs to conversions in 1994 is 1:3. Among the active newbuild FPSOs, the Kakap Natuna installed in 1985, has been in service the longest.
The maximum storage capacity of the existing fleet ranges from 47,000 bbl (Crystal Sea) to 2,000,000 bbl (Petrobras-P31, P32, P33 and P35). The storage capacity of an FPSO is partially a function of its production rate. It is logical to infer that the trend toward large production rates over the last four years should lead to a corresponding increase in FPSO size.
The largest storage capacities reported were for FPSOs installed within the last two years. As mentioned previously, Petrobras' vessels in Brazil all have a storage capacity of 2,000,000 bbl, while the FPSO Girassol and the FPSO VI, both currently under construction, have storage capacities of 1,981,000 and 1,750,000 bbl, respectively.
The maximum production rate ranges from 11,000 b/d of oil (San Jacinto) to 220,000 b/d (Norne). The average maximum production rate of the FPSOs prior to 1994 was 60,000 b/d of oil.
Since 1994, several FPSOs have achieved or exceeded maximum production rates of 200,000 b/d. The Norne FPSO has achieved this status, while the Girassol now under construction, and Åsgard A both are designed to have a maximum production rate of 200,000 b/d.
Water depth moored
The current fleet of FPSOs is moored in water depths ranging from 20 meters (Chang Qing Hao) to 1,853 meters (Seillean). Fifty of the active FPSOs are in water depths less than 300 meters. The trend shows that the operating water depth for active FPSOs was relatively constant at less than 200 meters until 1995.
Since 1995, there has been a dramatic increase in operating water depth. The FPSO Firenze was installed in 1995 at a water depth of 850 meters. The FPSO Seillean established the highest operating water depth of 1,853 meters early this year in the Roncador field offshore Brazil.
The oldest FPSO in the survey is the P34 (ex-P.P. Moraes) which has been in service for 20 years. If we exclude the 10 vessels under construction, the average age of the active FPSO fleet is 6 years.
The effect of the recent drop in the oil price has been more in the delaying rather than canceling of FPSO projects. Some of the delays are also attributable to the complexities of the field developments and negotiations with foreign partners.
There are many sources of FPSO projects planned or under study. While the number of estimated projects vary widely, a good range is somewhere between 75 and 120.
Preliminary design activity in shipyards confirms this. The bulk of the inquiries are for hulls with capacities of 1.5-2.0 million bbl. Indications are that a substantial number of these may be sanctioned in the 1st or 2nd quarter of 2000.
A majority of the FPSOs is moving toward newbuilds. These newbuilds can largely be attributed to the major oil companies getting into the FPSO market producing larger fields, which permit larger capital expenditures and require longer service life.
The concern of an oil spill is driving companies to choose double hull or double sides over a single hull configuration. The increasing number of newbuilds can also be attributed to the limited availability of existing double-hulled tankers.
The areas that show the most activity are West Africa and Brazil, with a combined 62.5% of likely projects. West Africa accounts for 37.5% while Brazil accounts for 25%.
In general, FPSOs in the UK and Norwegian sectors and for large deepwater developments in West Africa will be purpose-built. Early production FPSOs will be used
in some cases to accelerate production and cash flow while permitting better understanding of reservoir and choice of field development solutions.
Small, marginal fields in shallow to intermediate waters will continue to employ converted tankers or re-deployed FPSOs. Operators will reduce capital exposure and some risk by leasing from contractors. As the risks are passed on to contractors, bankers and financiers that provide capital will have to get a better grasp of technical, risk, and residual value issues associated with FPSOs.
Looking at the 5-10 year horizon, and assuming that oil prices remain in the $15-20/bbl range, FPSOs will continue to hold market share since future, large developments will be either in remote or in deepwater areas or both. This position will be secured as subsea and flow assurance technology inexorably marches onward while well intervention frequency
(a major hurdle for deepwater subsea developments) is reduced.
Tanker-based platforms will also be used for production-only oil or gas developments, as they may offer the lowest capital cost platform option.
Prognosticating even further into the future, it is entirely possible that we will see tanker or barge-based platforms supporting LNG or gas-to-liquids process facilities, and also store produced liquids for developing large stranded gas fields in offshore areas around the world. Industry is working diligently to reduce the size and costs of these facilities, while marinizing them to function on an offshore platform.
On the technology development front, the industry is working cooperatively on issues related to FPSO hull structural strength and fatigue integrity, improved predictions of platform mooring and riser system response and loads.
Considerable effort is being focused on developing steel catenary and wave riser designs for FPSOs, including use of titanium joints and prediction/mitigation of vortex induced vibration that could rapidly fail a riser in fatigue.
More emphasis is being placed on life cycle risk models that progress from design to planned maintenance and inspection programs that will improve overall safety while reducing operating costs.
The industry continues to offer variations of FPSOs that increase functionality and overcome present barriers. The biggest barrier is the ability to drill and/or workover wells. Emerging concepts that permit drilling on a turret moored FPSO have been around for several years.
In West Africa, with its mild directional seas and winds that permit spread mooring, adding drilling capability to an FPSO is readily achievable. Taking advantage of the low wave motions, FPSOs with drilling and surface trees are now on the boards and appear very promising.
It is not inconceivable that as confidence in the reliability of dynamic positioning systems increases, that fully dynamically-positioned FPSOs will eventually become available, resulting in major cost savings in ultra-deepwater developments.
The future of FPSOs looks very promising. The recent oil price slump has delayed but not significantly slowed the pace of FPSO-based developments. Its inherent versatility, advancing technologies, and improved project execution will ensure that FPSOs will continue to be in demand in existing offshore arenas as well as new frontiers around the world.
Ironically, this versatility may also be the biggest threat to its future growth, as existing FPSOs coming off contracts will be available to compete for new field developments.