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FUTURE FPSO PROJECTS IN THE

DECISION-MAKING PROCESS
Presentation by Jim McCaul at the
Emerging FPSO Forum 25 September 2013
OUTLINE OF PRESENTATION
The Pros and Cons of FPSOs
Profile of FPSO use worldwide
FPSO Projects in the Planning Stage
Our Forecast of FPSO Orders
Issues Impacting Outlook
FPSO PROS AND CONS
PRO
Has field storage and can be used in remote
locations self contained
Can operate on shallow or ultra-deepwater
fields
Less weight sensitive than other types of FPSs
Leasing transfers some risk from field operator
to contractor
Assumed residual value used as a competitive
tool in leasing bids
Deck area allows flexibility in process plant
layout
Surplus/aging tankers can be used for
conversion
Can be modified/redeployed following field
depletion
Quick disconnect turrets enable emergency
relocation

CON
Subsea tiebacks create higher well
maintenance costs
Turret/swivel machinery complex and failure a
major problem
Cost and delay surprises when converting
tankers to FPSOs
Redeploying an FPSO not as easy as it may
appear
Source: BWO
204 FPSOs ARE IN SERVICE,
AVAILABLE OR ON ORDER
(number of units as of September 2013)
27% of FPSOs are offshore
Brazil
21% are located offshore Africa
14% are off Northern Europe
12% are in Southeast Asia
7% are off China
7% are off Australia/NZ
5% are in other locations
7% are without field assignment
* * * *
13 FPSOs are currently off field
and looking for work
1 FPSO being built has no field
assignment
Note: Data exclude 4 small FPSOs used for well test in the GOM and
2 FPSOs built for emergency spill recovery

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Available
On Order
Existing
On Order
84% MORE FPSOs IN SERVICE THAN 10 YEARS AGO
WITH 123% MORE OIL PROCESSING CAPACITY
Number of FPSOs
in Service
Total Oil Processing
Capacity on FPSOs
(000s b/d)
Avg. FPSO Oil
Processing Capacity
(000s b/d)
Avg. Water Depth of
FPSO Installations
(meters)
2003 2013 % Chg. 2003 2013 % Chg. 2003 2013 % Chg. 2003 2013 % Chg.
Africa 18 38 111% 1396 4390 214% 78 116 49% 208 678 226%
Australia/NZ 9 12 33% 657 979 49% 73 82 12% 152 290 91%
Brazil 9 37 311% 845 3937 366% 94 106 13% 826 1075 30%
Canada 1 2 100% 150 250 67% 150 125 -17% 90 105 17%
China 11 13 18% 734 902 23% 67 69 4% 105 77 -27%
Gulf of Mexico 0 2 n.a. 280 n.a. 140 n.a. 1339 n.a.
India 0 2 n.a. 120 n.a. 60 n.a. 643 n.a.
Mediterranean 5 3 -40% 174 77 -56% 35 26 -26% 228 321 41%
N. Europe 19 22 16% 1783 1884 6% 94 86 -9% 167 159 -5%
SE Asia 11 22 100% 401 877 119% 36 40 9% 67 137 104%
Global Total 83 153 84% 6140 13696 123% 74 90 21% 227 534 135%
Note: Data exclude 13 FPSOs currently without field contract, a spill recovery FPSO and 4 small FPSOs used for well test on the Mexico side of GOM.
44% OF FPSOs IN SERVICE OR
ON ORDER ARE LEASED
Total
FPSOs
Owned
Units
Leased
Units % Leased
Africa 42 23 19 45%
Australia/NZ 14 9 5 36%
Brazil 56 31 25 45%
Canada 2 2 0 0%
China 14 14 0 0%
Gulf of Mexico 3 0 3 100%
India 3 0 3 100%
Mediterranean 3 2 1 33%
N. Europe 28 16 12 43%
SE Asia 25 10 15 60%
Global Total 190 107 83 44%
Note: Data exclude 14 existing and on order FPSOs without field contract, 2 spill recovery FPSOs and 4 small FPSOs used
for well test on the Mexico side of GOM.
MORE THAN 120 FPSO PROJECTS ARE IN
THE VISIBLE PLANNING STAGE
These are announced discoveries where an FPSO is either
planned or logical production solution given the location
and field characteristics
~25% are in the bidding or final design stage
~75% are in the planning and study phase

Taking into account projects requiring multiple production
units, development of the discoveries could require 135 to
140 FPSOs

Another 20+ discoveries could require an FPSO, BARGE,
MOPU/FSO, SUBSEA or other system
WHERE FPSO PROJECTS
ARE BEING PLANNED
Brazil is clearly the major location
for future FPSO projects 51
projects in planning stage
Africa is next in line with 13
projects in Angola, 11 Nigeria and 9
elsewhere
SE Asia is in 3
rd
place with 11
projects
No. Europe is in 4
th
place with 8
projects
In 5
th
place is the GOM 6 projects,
all on the Mexican side

Brazil
41%
Africa
27%
GOM
5%
N. Europe
7%
SE Asia
9%
Other
11%
51
33
6
8
11
14
EXAMPLES OF FPSO
PROJECTS IN THE
PLANNING STAGE
Discovery Country Field Operator
Water
Depth
Estimated
Production Start
Africa
(meters)
Blk 32 -- Kaombo GG Angola Total 1600 2016/17
Bonga Southwest Nigeria Shell 1200 2017/19
Nsiko Nigeria Chevron 1768 2018/20
Elephant Congo CNOOC 550 2020/25
Bobo Nigeria Shell 2480 2020/25
Brazil
Oliva/Atlanta BS-4 Brazil Queiroz Galvao 1560 2017/19
Carioca BM-S-9 Brazil Petrobras 2150 2016
Carcara BM-S-8 Brazil Petrobras 2027 2018
Espadarte Module III Brazil Petrobras 750 2020
Libra Complex Brazil Petrobras/ANP 2200 2020/25
Franco Leste Brazil Petrobras 1800 2019
Other Regions
Ayatsil/Tekel Mexico Pemex 115 2016/18
El Perdido Mexico Pemex 2500-3000 2018/22
Kraken 9/2b UK EnQuest 100 2016/17
Gohta Norway Lundin 342 2020/25
Sea Lion Falklands Premier 450 2018/20
Belud Malaysia Hess 155 2015/16
Bunga Dahlia/Teratai Malaysia Petronas 65-70 2016/18
Ubah Malaysia Shell 1430 2018/20
D-56 India BP/Reliance 1743 2019-22
LOCATION AND TIMING OF
VISIBLE FPSO PROJECTS
Visible
Projects
Likely Production
Start
Number FPSOs
Required
2014/20 2020+ 2014/20 2020+
Africa 33 17 16 17 16
Australia/NZ 1 1 0 1 0
Brazil 51 29 22 29 36
Canada 2 0 2 0 2
China 1 1 0 1 0
Gulf of Mexico 6 4 2 4 2
Mediterranean 3 3 0 3 0
N. Europe 8 7 1 7 1
Other So. Amer 3 3 0 3 0
SE Asia 11 11 0 11 0
SW Asia 4 3 1 3 1
Global Total 123 79 44 79 58
PROCESSING PLANT CAPACITY IN
VISIBLE FUTURE FPSO PROJECTS
(b/d in 000s)

58% require topside plants with
100,000 to 200,000 b/d oil
processing capability
21% require topside plants with
50,000 to 100,000 b/d capacity
10% involve small FPSOs with
less than 50,000 b/d plants
3% are mega- FPSOs with more
than 200,000 b/d processing
capacity
7% are primarily gas FPSOs
<50 b/d
50-100 b/d
100-150 b/d 150-200 b/d
200+ b/d
Gas
14
29
44 36
4
10
BREAKDOWN OF PROCESSING CAPACITY REQUIRED FOR
VISIBLE FUTURE FPSO PROJECTS
(b/d in 000s)
FPSOs Required Between 2014-2020 FPSOs Required 2020+
<50 b/d
50 to
100 b/d
100 to
150 b/d
150 to
200 b/d 200+ b/d Gas <50 b/d
50 to
100 b/d
100 to
150 b/d
150 to
200 b/d 200+ b/d Gas
Africa 5 7 2 2 1 5 5 4 1 1
Australia/NZ 1
Brazil 2 15 9 3 3 12 21
Canada 2
China 1
Gulf of Mexico 2 1 1 1 1
Mediterranean 2 1
N. Europe 2 5 1
Other So. Amer 3
SE Asia 6 2 1 2
SW Asia 2 1 1
Global Total 14 19 24 11 3 8 0 10 20 25 1 2
WHAT WILL DRIVE THE PACE OF FUTURE
FPSO ORDERS?
Underlying market conditions
Smaller FPSOs for marginal fields are influenced by near term oil price
expectations and availability of financing
Large FPSOs intended for major developments tend to be less sensitive
to oil price and financing
Passing the FID hurdle
But even the biggest oil company has to make choices -- there are
budget constraints and limits on available personnel to manage project
implementation
Whether an FPSO project gets into the CAPEX plan depends on its
ranking in terms of expected return on investment
This will be determined by the project economics and the economics
of other investment possibilities




MARCH 2013 FORECAST OF FPSO ORDERS
OVER THE NEXT 5 YEARS
76
90
110
130
No. Orders
2008/12
Low
Forecast
Most
Likely
High
Forecast
No. Orders 2013/17
Forecast
next 5 years
Actual
past 5 years
Most Likely Forecast Assumptions
Global economic growth averages 3
to 4 percent annually over next few
years
Oil demand growth remains around 1
percent per year
Mideast tensions continue, but no
major oil supply interruption
Oil price expectations hover in $90 to
$110 range
Some cost growth and delivery
bottlenecks in the FPSO supply base,
but not enough to slow major project
starts or erode contractor profits
No major environmental incident
involving an FPSO
No major impact from shale oil on
deepwater investment


ASSUMPTIONS UNDERLYING THE
HIGH AND LOW FORECASTS
Low Forecast Assumptions

China and/or India economies falter,
Europe/U.S. economies continue to stagnate
over next few years
World GDP growth turns downward
Global oil demand growth falls as economic
activity and world output slows
Tight oil, shale oil finds grow internationally,
technology advances lower cost
Oil price expectations fall to $70 to $90
range, negating commercial viability of many
visible marginal floating production projects
Contractors experience supply constraints,
raising costs, creating delivery delays

High Forecast Assumptions

Global economic rebound accelerates quickly
from 2013 onward, rises to 4 %+ per year
Oil demand growth tracks upward with
economic growth
Mideast tensions grow, oil supply interrupted
Shale oil and/or tight oil projects meet
worldwide opposition, delaying project starts
Many unconventional onshore fuel projects
encounter continuing logistics constraints
Oil prices spike to $150+ and expectations
remain above $120, making most visible
marginal floating production projects
commercially viable
Little cost growth, few delivery constraints in
the floater supply chain

THE LOW END OF THE MARCH FORECAST IS
NOW LOOKING MORE LIKELY
Portfolio of potential FPSO projects has been
growing
But new project starts have slowed 9 FPSOs have
been ordered thus far in 2013, an average of 1
order/month
Cost growth, access to financing, market barriers,
other issues seem to be creating barriers
We now see the low end of the forecast range i.e.,
~90 FPSOs as the most likely forecast of FPSO
orders
ISSUES
Local content requirements are
Creating market entry barriers and limiting
competition
Raising costs e.g., Egina FPSO $3.1 billion!
Clogging the supply chain
Shale oil/tight oil growth is a threat to deepwater
Added supply could result in lower oil prices
Shale oil projects could draw investment resources
from deepwater
Deepwater costs are increasing shale oil/tight oil
cost are falling

Thank You
If you would like to discuss any aspect of
this presentation or get further details on
the FPSO market, please contact
Jim McCaul
imaassoc@msn.com or
1 202 333 8501
Our website has further information that
you may find useful. Please give us a visit.
www.imastudies.com