The offshore industry has talked about industrializing engineering and construction of floaters for decades. Is this the answer to FPSO delivery and supply constraints?
To satisfy burgeoning energy demand we need efficient production from offshore assets. This means completion of projects on time and within budget, give or take 10%. Looking at the FPSO supply chain, by far the most valuable section of the floaters market, field operators and leasing contractors would be delighted with a mere 10% of cost and schedule overruns. The standard delay to first oil is often around the one-year mark and costs typically exceed their budgets by 35%.
Douglas-Westwood forecasts demand approaching 100 new FPSOs between now and the end of 2017 and others predict more. But the existing supply chain cannot deliver these on time and budget.
Now could be the time to act, but to do it the oil companies will need to work together. We can see it happening in pockets off West Africa or with Petrobras’ ‘replicates’. Faster first oil, more predictable budgets, simpler redeployment, improved maintenance and safety, local content demands – all these issues point toward a more standard approach to FPSO delivery. Industrialization or not, the supply chain needs repair.
Matt Loffman, Douglas-Westwood, Houston
+1 832 895 6527 or [email protected]