Floating production has evolved to a mature technology that opens for development oil and gas reservoirs that would be otherwise impossible or uneconomic to tap. The technology enables production far beyond the depth constraints of fixed platforms, generally considered to be 1,400 feet, and provides a flexible solution for developing short-lived fields with marginal reserves and fields in remote locations where installation of a fixed facility would be difficult.


Types of Floaters -- Floating production systems vary greatly in appearance -- from ship-shape FPSO vessels to multi hull production semis to cylindrical shaped production spars. But common to all is machinery and equipment to lift oil and gas from seabed wells and perform initial processing of the raw production. Here's a brief rundown of the systems in operation.


FPSO vessels -- xx FPSOs are in service, another 21on order. 14 of the units on order are purpose built hulls, 10 are conversions of vintage tankers, mostly VLCCs. FPSOs are found in all offshore areas where floating production is used -- with the notable exception of the Gulf of Mexico where FPSOs have still not been employed. The largest presence of FPSOs is in the North Sea and off Africa. 19 units are now operating in each area. They range in size from 50,000 bbl tankers with capability to process 10,000 to 15,000 b/d -- to VLCC size units able to process more than 200,000 b/d and store 2 million barrels (e.g., the Bonga FPSO off Nigeria will be able to produce 225,000 b/d).

Some are held in place with a simple spread mooring system, some are fitted with a turret system that allows the vessel to weathervane. A few small units are held in place by dynamic positioning. The choice of mooring system depends on local weather and sea conditions. As many as 60 to 70 subsea wells can be tied back to the production unit (e.g., Dalia FPSO off Angola will be tied to 67 wells through 9 manifolds) or the unit could be producing from only one well. Off-take and delivery of oil is accomplished using shuttle tankers, typically using tandem stern loading on weathervaning units and transfer via CALM buoy on spread moored units, with tandem loading usually provided as backup.


Cost of FPSOs varies greatly. Capital expenditure for a high production purpose built FPSO for a large field offshore Africa can exceed $700 million, with the hull costing $100 to 120 million, the topsides $500 to 600 million. The Girassol FPSO, now operating off Angola, cost $756 million. The hull cost $150 million, topsides $520 million and project management and delivery comprised the balance. A more recent project, the Erha FPSO being built for offshore Nigeria, carries a total contract price of $700 million, with the hull costing $110 million, topsides and delivery the balance. At the other extreme, an FPSO for a marginal field utilizing a second hand tanker and fitted with a 50,000 b/d plant could entail a capex of one tenth this amount. The operator of the Okwori field off Nigeria is planning to use an FPSO for production, but only if total capex for development is within $120 million. An FPSO operating offshore Libya since 2001 began producing on the field for a capital expenditure of $55 million, with conversion and topsides plant installation done at Malta Drydocks.


Hull and topsides contracts are sometimes awarded separately, sometimes awarded as a single contract. Sometimes the bidders are given the choice of taking the whole thing or just a portion. The upcoming competition for the Akpo FPSO contract will divide work into three packages -- hull, topsides and project management -- and bidders will have the choice of bidding one, two or three work packages.

FPSO fabrication and conversion contracts have become the province of Asian yards. Samsung and Hyundai are the big players in high end FPSO fabrication (e.g., units for Kizomba, Dalia, White Rose, etc). Dalian and Shanghai Waigaoqiao have been making inroads on low end projects (e.g., Belanak, Caofeidian, Panyu FPSOs). Almost all recent FPSO conversion work has been captured by Keppel, Jurong, Dubai Drydocks and MSE.


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