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    Floating production - $42 billion market forecast

    News // May 18, 2001
    The next five years could see 123 floating production systems (FPSs) of various types coming onstream with a newbuild value of $42 billion, according to a major report by oil and marine business analysts Douglas-Westwood and offshore field data specialists Infield Systems. The annual value of the market will grow from an estimated $5.9 billion in 2001 to $10.9 billion in 2005, they claim.

    Although there are several types of floater in use and proposed, the report forecasts that 80 per cent of future expenditure will be on FPSOs and expects that Africa will grow into the largest market with a total value of $11.6 billion over the five years, followed by Latin America (Brazil), where the market is forecast to total $7.9 billion.

    According to Dr Roger Knight, data manager with Infield Systems, the upside could be even greater.

    "Over the period a total of 153 field prospects are under consideration for development using an FPS by 48 oil & gas companies. Just five companies total 86 (52 per cent) of the prospects; Petrobras 19, BP Amoco 18, the combined Chevron Texaco 16, TotalFinaElf 12, Shell 11 and ExxonMobil 10."

    Africa is forecast to form the largest market both in terms of the number required and total value. Although North America has 25 floaters in prospect, currently all are semis, SPARs and TLPs. FPSOs have not yet been deployed in the Gulf of Mexico.

    The first floating production system was installed in the North Sea 1975, but the past decade has seen considerable growth in the percentage of offshore fields using a floating production system. In 1991 floaters accounted for 2 per cent of new field developments, in 2001 it is 27 cent and future prospects are even greater.

    There are many situations where the FPS is able to make otherwise marginal fields economic by allowing production in locations remote from pipelines, for example of small, other wise uneconomic fields and especially fields in deepwater.

    Their advantages over fixed platforms include low decommissioning costs as the FPS can be 'sailed away' at the end of the field's life and often re-used. This can allow FPS costs to be amortised over several fields (and can make floaters a greener optionthan single-use fixed platforms).

    "In theory, over the next five years, some 55 FPSs could become available for re-use due to field depletion" said Douglas-Westwood director John Westwood, "and these have a potential to reduce the demand from our forecast of 123 units to 68. However, this scenario is unlikely as field depletion dates could be extended due to robust oil prices and conservative initial estimates of field life. In addition, some of the earlier units may not be suitable for re-deployment."

    The timing of the report is coincidental with the recent sinking of the Roncador P-36 floater, but it does note that following the tragedy concerns have been raised over operations of the other floaters situated offshore Brazil.

    John Westwood said that "the alternative of fixed platforms has also been thesubject of tragic events and we will be very surprised if the eventual outcome of the enquiry casts any doubt on the concept of floating production".

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