The number of floating production systems (FPSs) is growing. According to a recent report by International Maritime Associates Inc. (IMA), 250 floating production units are now in service or available worldwide. Five years ago, there were 177 units. Ten years ago, the number of floaters stood at 119.

Ten field operators account for 52% of floater projects being planned.
(Chart courtesy of International Maritime Associates Inc.)

In the current inventory, IMA places the number of floating, production, storage, and offloading (FPSO) vessels at 155. There are 42 floating production semisubmersibles (FPSSs), 22 tension-leg platforms (TLPs), 18 production spars, eight production barges, and five floating storage regasification units (FSRUs). And the number of vessels under construction is set to increase fleet sizes even further.

Strong backlog
Data gathered by IMA indicate the current order backlog includes 49 production floaters. A total of 35 of these are FPSOs. There are six FPSSs, one TLP, three FSRUs, and four floating gas liquefaction (FLNG) vessels on the books as well.

Brazil continues to dominate orders for production floaters. In fact, many of the FPSs on order are being built for Petrobras. Of the 49 production floaters being constructed, 19 units are being built for use offshore Brazil. This constitutes approximately 40% of the order backlog.

Seven units on order have not been contracted for a particular field. These include four FLNGs, one FPSO in liquidation, and two FPSOs where work has been slowed.

As of mid-November, of the current fleet of available FPSs, 11 floaters were idle and looking for work. Unfortunately, not all of these units are likely to find new employment. In fact, some are candidates for retirement. Among the remaining available units are at least a half-dozen FPSOs that appear capable of being modified and competitively redeployed in IMA’s view. In addition, the three FPSOs and four FLNGs that were ordered on spec are available for deployment. The number of units available likely will grow in the course of the next several years.

Meanwhile, a significant number of FPSOs are reaching end of field life. Three of these have been onsite for more than 20 years, eight of them have been working for more than 15 years, and 27 have been onsite for more than 10 years.At least half of these units appear to be candidates for redeployment. In particular, the 15 units that have been operating in the North Sea for more than 10 years and the two that have been operating offshore Australia for a similar period all are FPSs that could be redeployed.

Available floating production units (FPUs) as of mid-November 2010. (Table courtesy of International Maritime Associates Inc.)

FPS market future
All in all, the floater segment looks promising. According to Jim McCaul, head of Houston/Washington-based IMA, “The fundamentals driving the floating production market look very strong.” IMA now is tracking 196 offshore projects at various stages of design or planning that potentially require a floating production or storage system, he said.

New safety and permitting regulations imposed as a result of the Macondo spill will slow the startup of drilling in the short term and add cost to future offshore development, McCaul said, noting that new regulations are unlikely to have a major long-term impact on project development in the Gulf of Mexico.

“There will be added burden to obtaining permits and higher cost for equipment, such as upgraded BOPs,” he said, “but the burden will be insignificant inthe context of the revenue potential of a large producing well.”

According to McCaul, despite assumptions to the contrary, development in the Gulf of Mexico has not stood still over the past six months.

“While the drill moratorium was in place, several major deepwater projects in the Gulf of Mexico moved to the development stage. A contract for a production semi on Tubular Bells was awarded, and contracts for production floaters on three other projects (the Olympus TLP, Jack/St. Malo production semisubmersible, and Bigfoot TLP) moved to the contract-imminent stage,” he said.

The Macondo spill generated a flurry of proposals to suspend drilling in other deepwater areas, butmany of those proposals were rejected as unnecessary.

“The proposal by the European Commission to impose a moratorium on deepwater drilling offshore Europe was rejected,” McCaul said, and “Canadian authorities decided no drilling ban offshore Canada was necessary.” Meanwhile, in Brazil, the most important floater region in terms of number of FPSs deployed, the deepwater business is simply, “business as usual.”

According to McCaul, demand continues to drive production. “At the end of the day, the world needs oil,” he said, “and deepwater is a major source of future production.”

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