Growing use of floating production units seen

Offshore operators are considering using floating producing systems (FPSs) in 135 potential developments expected to come forward worldwide over the next 5 years.

John Westwood, partner at Douglas-Westwood Associates, Canterbury, U.K., told a London conference on Nov. 20 that this total compares with 75 that were under consideration in the past 5 years.

Westwood told delegates that 89 oil companies around the world are considering field developments involving FPSs: "The leader of the pack is Petrobras, with 27 prospects, but virtually all the majors have significant numbers planned."

"It was an FPS that was responsible for the U.K.'s first offshore oil in June 1975," said Westwood, "but the market really took off from 1993. Looking ahead, we expect a continuing strong demand, for a number of reasons."

Westwood cited the depletion of fields in less than 100 m of water that are accessible for fixed platforms; the increasing number of remote finds for which floaters are suited; the ease of decommissioning compared with fixed platforms-"a major consideration since the Brent spar furor;" and the potential for easy reuse.

"Over the next 5 years," said Westwood, "we expect 90% of the world's deepwater capital expenditure to be associated with floating production systems. However, it must be stressed that there are at least 83 prospects for FPSs in water depths of less than 250 m."

The analyst reckons floater developments over the next 5 years will require a combined capital outlay of more than $70 billion, with annual spending on floater projects rising from $10.7 billion in 1998 to almost $19 billion in 2002.

These developments are expected to require a total of: 65 FPSs of various types, including tension-leg and spar platforms; 1,296 well completions, about 98% of which would be subsea; 8,525 km of pipelines and risers of up to 16 in.; and 5,800 km of control lines.

Douglas-Westwood said that a typical future deepwater field development would be in 766 m of water, with up to 10 wells and a production rate of 35,300 b/d of oil.

Innovations needed

In a recent report, Douglas-Westwood said that the scale of the expenditure forecast for floaters in the next 5 years demands commercial innovation from the project participants.

"We expect," said the analyst, "an increasing proportion of the up-front costs of deepwater developments to be defrayed by operators leasing major items of hardware, particularly reusable units such as FPSs and perhaps some seabed hardware.

"We expect growth in the major contractors involved in field development taking payment by way of a share in future production. And there will be a growing use of field development and operation contractors offering a complete through-life service from discovery to abandonment."

Douglas-Westwood said the greatest industry concern currently is low oil prices: "What is little understood are the benefits they can bring to the offshore industry. Low prices are the driving force behind many of the major technological changes that have massively reduced industry costs. There is no greater example of this than the production of deepwater oil and gas."