Demand for mobile production units (MPUs) has increased rapidly during the 1990s, and technical development and the opening of new plays will ensure demand will continue to grow in the medium term.
This is the view of Smith Rea Energy Analysts Ltd., Canterbury, U.K., which said the MPU has become accepted as a standard means of offshore production, not only where lack of infrastructure, small size of reservoir, and water depth render other types of production facility uneconomic, but as a base case by which to judge other options.
"Development with MPUs was dominated historically by technical engineering concerns," said Smith Rea. "More recently, a change of commercial attitude has become important.
"At first, oil company ownership was almost universal, but oil companies gradually realized that returns could be enhanced by the use of contractor capital.
"With contractors accepting the residual risk of MPU ownership, there has been an increasing role for the MPU contractor. The recent acceleration in activity has been accompanied by a growth in the number of MPU contracts, and oil company tenders produced responses from an ever-larger number of bidders."
Smith Rea said MPU market forces have recently been increasingly directed towards finding the most cost-effective gas disposal routes. Driven by the growing unacceptability of flaring, an increasing number of MPUs have been provided with pipeline connections to take associated gas to market.
The analyst said there are 120 MPUs in operation today worldwide and 30 under construction or being converted. Technical progress is expected to continue at a high rate, and new plays are likely to be penetrated by MPUs.
"By the year 2001," said Smith Rea, "the number of all MPUs in employment will be around 157, and in 2003 there will be 180, implying a demand for some 60 newbuildings or conversions in the next 5 years, or some 40-50 more than at present committed."
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