Operators, regulators urge FPSO use in US waters

An international panel of government regulators and industry operators testified Wednesday to some 20 years of successful use of floating production, storage, and offloading vessels to develop offshore oil fields around the world. But despite one strong recommendation that FPSOs be treated like any other permanent offshore production facility, US Coast Guard officials emphasized that such vessels will be regulated as ships if the US Minerals Management Service okays their use in US waters.

Jun 9th, 2000


Sam Fletcher
OGJ Online

HOUSTON�An international panel of government regulators and industry operators testified Wednesday to some 20 years of successful use of floating production, storage, and offloading vessels (FPSOs) to develop offshore oil fields around the world. But despite one strong recommendation that FPSOs be treated like any other permanent offshore production facility, US Coast Guard officials emphasized that such vessels will be regulated as ships if the US Minerals Management Service okays their use in US waters.

That means double hulls for FPSOs to protect against rupture of oil storage tanks adjacent to the sea areas�the same as required for oil tankers under the Oil Pollution Act of 1990 (OPA '90).

Industry officials generally concede the need for double hulls along the sides and ends of FPSOs to guard against gashes in possible collisions with tankers during lightering operations to move the oil to shore. "But not double bottoms�that just adds unnecessarily to the total cost," an executive with one major oil company told OGJ Online.

"These FPSOs are going to be almost permanently stationed in waters so deep that there's no danger of ever running aground," he said. "In the rare case when they have to come to port for inspection and maintenance, the oil should be completely offloaded."

Flags, crews
As ships, US-flagged FPSOs also will be required to employ US citizens in all marine jobs, said Coast Guard officials at the start of a 2-day workshop in Houston to explore the risks of using those vessels in US waters (OGJ Online, May 12, 2000). However, it's "conceivable" that a foreign-owned, foreign-flagged FPSO, working for an offshore operator headquartered outside the United States, could operate in the gulf with a foreign crew, said Lt. Commander Russell Proctor of the Coast Guard.

Although the MMS and Coast Guard have a memorandum of understanding dividing the regulation of proposed FPSO projects in US waters, MMS officials said use of foreign-flagged FPSOs is strictly a Coast Guard decision. Crewing and other issues involving foreign-flagged FPSOs will be decided on a case-by-case basis, depending on the contractual or other involvement of US companies, Proctor said.

Water depths, infrastructure
The first monohull FPSO was used in 1977 to produce 20,000 b/d from a well in the Mediterranean. Since then, FPSOs have become the most widely used floating production system in the world, working in every major offshore area outside of US waters.

There are now 61 FPSOs operating around the globe, and 11 more are under construction. Since 1995, FPSO projects have been coming on stream around the world at an average rate of two per year. The UK has the most, with 16.

However, MMS officials say they have not yet had a single request for the use of an FPSO to produce an oil field in US waters.

Exxon Corp. did operate a similar vessel�an offshore storage and treating vessel (OS&T)�about 3 miles off the coast of Santa Barbara for more than 10 years, one source pointed out to OGJ Online. The Santa Ynez OS&T was decommissioned a few years ago after successfully carrying out its intended duties. It took production from the nearby Hondo platform and treated and stored the crude for tanker offloading.

Industry officials report that 85% of the FPSOs now in use are located in water depths less than 1,000 ft, in areas where offshore pipeline infrastructure is almost non-existent�not like the US sector of the Gulf of Mexico, where, for more than 50 years, the industry has built the most widespread infrastructure for offshore production.

But the industry is now pushing into deeper waters of the gulf, beyond the current infrastructure. And they are looking at the use of subsea wells with production lines tied back through a mooring turret on an FPSO to reduce costs and speed initial production.

Moreover, industry officials have indicated that, for some deepwater oil fields in the gulf, "pipelines are no longer technologically or financially feasible," said Capt. Gordon Marsh, assistant chief of marine safety for the Coast Guard's eighth district. But before they'll approve use of FPSOs in US waters, MMS officials must be sure that they don't pose any increased risk of spills or other mishaps, compared to alternative production facilities, said Carolita Kallaur, associate director.

A major accident could undermine public acceptance of all offshore operations in US waters, she told participants at the workshop, sponsored by the MMS, the Coast Guard, the industry DeepStar Project, and the Texas A&M Offshore Technology Research Center (OTRC).

Kallaur hailed the workshop as "an important element of the decision process." A MMS decision on the use of FPSOs in the gulf could be issued in February, Kallaur said. A draft of the environmental impact study by the MMS on FPSOs will be released next month, followed by public hearings in August, she said.

"We want to avoid writing regulations that will have to be revised every year or two," said MMS staffer James Regg. "We want to concentrate on a strategy that is flexible enough to meet our needs and your needs."

But comparison of FPSOs to other offshore production facilities, such as tension-leg platforms (TLPs) and spars, "is inherently difficult because of the lack of long-term data" on any of those relatively new facilities, said E.G. "Skip" Ward, OTRC associate director. That research center currently is testing FPSO models in its large wave basin designed to duplicate real ocean conditions.

FPSOs in use around the world
Government regulators from Australia, Brazil, Canada, Mexico, New Zealand, Norway, and the United Kingdom touched on several potential issues in describing experiences with FPSOs in their countries.

Based on his work with FPSOs in both the UK and Australia, Paul Finnigan with Western Australia's Department of Minerals & Energy, described the "inherent safety" of the vessels.

Australia has several FPSOs in operation, including the world's largest, the Northern Endeavour. Some are converted tankers, and some are specially designed newbuilds. Some are installed as permanently fixed facilities, while others are able to disconnect from their mooring point to operate as ships in the face of the massive cyclones that frequently batter Australia's western coast.

But tankers that are converted to FPSOs often retain their original central pumping systems, which may be more hazardous than the more diverse pumping systems aboard newbuild vessels, Finnigan said. Conversions also may not have double hulls or bottoms.

Deepwater FPSOs may be too far from shore for quick evacuation by helicopter and would have to rely on escape craft or standby vessels in case of emergency, said Finnigan. He also noted construction costs overruns for some recent FPSOs, because of "different cultures" between oil companies and shipyards.

Deborah Martinez de Mattos with Petroleo Brasileiro SA said that company has converted tankers to "like-new" FPSOs by replacing "everything but the hull."

Stephen A Ovens, chief petroleum inspector for the Occupation Safety & Health Service in New Zealand, said FPSOs in his country's waters are treated as offshore facilities, "the same as a platform," operated by small crews cross-trained in both marine and production operations.

He also warned that a tanker that is allowed to "weathervane" around the connecting oil production line to face into the prevailing wind could also be engulfed by smoke from a fire in the bow, hindering evacuation.

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