By OGJ editors
HOUSTON, Sept. 27 -- Of the 26 redeployments of floating production and storage vessels (FPSOs) proposed in 2004-08, 21 will probably be completed at a cost of $830 million, said John Westwood, managing director of Douglas-Westwood Ltd., Canterbury.
At a recent conference in London, Westwood said FPSOs "are the world's most popular floating production system.
Through yearend 2003, there had been 136 FPSO deployments worldwide—more than all the other floating production systems.
"There are currently 89 FPSOs in operation, and as the fields they are working on are depleted, the vessels become available for redeployment," Westwood said. Unlike fixed platforms, an FPSO can be moved to new locations, and its capital cost can be amortized over the life of several small fields.
However, Westwood said, "In a period of very high oil prices, it is more likely for existing contracts to be extended as oil companies retain FPSOs on depleting fields to 'scrape the barrel.'"
Georgie MacFarlan, a Douglas-Westwood FPSO data analyst, said, "The Asia region is expected to see the highest number of redeployments, with eight units forecast for the period to 2008, compared to just one redeployed unit in the previous 5-year period."
Development of marginal fields, a key driver for the floating production system market, is expected to underlie much of the demand for redeployments. "We are now seeing companies emerging with the sole aim of targeting this small-fields market, such as the Aberdeen-based Vienco [Oil & Gas Ltd.], and this is expected to provide significant upside potential to our forecasts, particularly in the North Sea area," MacFarlan said.
The lower upfront costs and shorter delivery times provided by redeployments make this "an increasingly attractive field development solution," the analysts said. They see strong opportunities for FPSO leasing contractors for the next 5 years.
