Future FPSO Projects in the Decision

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FUTURE FPSO PROJECTS IN THE
DECISION-MAKING PROCESS
Presentation by Jim McCaul at the
Emerging FPSO Forum 25 September 2013
OUTLINE OF PRESENTATION
 The Pros and Cons of FPSOs
 Profile of FPSO use worldwide
 FPSO Projects in the Planning Stage
 Our Forecast of FPSO Orders
 Issues Impacting Outlook
FPSO PROS AND CONS
PRO
CON
•
Has field storage and can be used in remote
locations – self contained
•
Subsea tiebacks create higher well
maintenance costs
•
Can operate on shallow or ultra-deepwater
fields
•
Turret/swivel machinery complex and failure a
major problem
•
Less weight sensitive than other types of FPSs
•
•
Leasing transfers some risk from field operator
to contractor
Cost and delay surprises when converting
tankers to FPSOs
•
Redeploying an FPSO not as easy as it may
appear
•
Assumed residual value used as a competitive
tool in leasing bids
•
Deck area allows flexibility in process plant
layout
•
Surplus/aging tankers can be used for
conversion
•
Can be modified/redeployed following field
depletion
•
Quick disconnect turrets enable emergency
relocation
Source: BWO
204 FPSOs ARE IN SERVICE,
AVAILABLE OR ON ORDER
(number of units as of September 2013)
56

42
28
OnOrder
Order
On
Existing
Available
25
14 14
14
3
3
3







2

e
a
o
n
a
a
il
a
a
d
Z
az fric rop Asi a/N hin ndi nea exic nad Fiel
r
I
a
C
li
B . A Eu
M Ca No
rr
SE stra
of
o.
ti e
W
N
A
u
M
ed
ul
G
f

27% of FPSOs are offshore
Brazil
21% are located offshore Africa
14% are off Northern Europe
12% are in Southeast Asia
7% are off China
7% are off Australia/NZ
5% are in other locations
7% are without field assignment
* * * *
13 FPSOs are currently off field
and looking for work
1 FPSO being built has no field
assignment
Note: Data exclude 4 small FPSOs used for well test in the GOM and
2 FPSOs built for emergency spill recovery
84% MORE FPSOs IN SERVICE THAN 10 YEARS AGO –
WITH 123% MORE OIL PROCESSING CAPACITY
Number of FPSOs
in Service
Total Oil Processing
Capacity on FPSOs
Avg. FPSO Oil
Processing Capacity
(000s b/d)
(000s b/d)
Avg. Water Depth of
FPSO Installations
(meters)
2003
2013
% Chg.
2003
2013
% Chg.
2003
2013
% Chg.
2003
2013
% Chg.
Africa
18
38
111%
1396
4390
214%
78
116
49%
208
678
226%
Australia/NZ
9
12
33%
657
979
49%
73
82
12%
152
290
91%
Brazil
9
37
311%
845
3937
366%
94
106
13%
826
1075
30%
Canada
1
2
100%
150
250
67%
150
125
-17%
90
105
17%
China
11
13
18%
734
902
23%
67
69
4%
105
77
-27%
Gulf of Mexico
India
0
2
n.a.
280
n.a.
140
n.a.
1339
n.a.
0
2
n.a.
120
n.a.
60
n.a.
643
n.a.
Mediterranean
5
3
-40%
174
77
-56%
35
26
-26%
228
321
41%
N. Europe
19
22
16%
1783
1884
6%
94
86
-9%
167
159
-5%
SE Asia
11
22
100%
401
877
119%
36
40
9%
67
137
104%
Global Total
83
153
84%
6140
13696
123%
74
90
21%
227
534
135%
Note: Data exclude 13 FPSOs currently without field contract, a spill recovery FPSO and 4 small FPSOs used for well test on the Mexico side of GOM.
44% OF FPSOs IN SERVICE OR
ON ORDER ARE LEASED
Total
FPSOs
Owned
Units
Leased
Units
% Leased
Africa
42
23
19
45%
Australia/NZ
14
9
5
36%
Brazil
56
31
25
45%
Canada
2
2
0
0%
China
14
14
0
0%
Gulf of Mexico
3
0
3
100%
India
3
0
3
100%
Mediterranean
3
2
1
33%
N. Europe
28
16
12
43%
SE Asia
25
10
15
60%
Global Total
190
107
83
44%
Note: Data exclude 14 existing and on order FPSOs without field contract, 2 spill recovery FPSOs and 4 small FPSOs used
for well test on the Mexico side of GOM.
MORE THAN 120 FPSO PROJECTS ARE IN
THE VISIBLE PLANNING STAGE
• These are announced discoveries where an FPSO is either
planned or logical production solution given the location
and field characteristics
~25% are in the bidding or final design stage
~75% are in the planning and study phase
• Taking into account projects requiring multiple production
units, development of the discoveries could require 135 to
140 FPSOs
• Another 20+ discoveries could require an FPSO, BARGE,
MOPU/FSO, SUBSEA or other system
WHERE FPSO PROJECTS
ARE BEING PLANNED
•
Brazil is clearly the major location
for future FPSO projects – 51
projects in planning stage
•
Africa is next in line – with 13
projects in Angola, 11 Nigeria and 9
elsewhere
•
SE Asia is in 3rd place with 11
projects
•
No. Europe is in 4th place with 8
projects
•
In 5th place is the GOM – 6 projects,
all on the Mexican side
Brazil
41%
51
33
Africa
27%
14
6
GOM
5%
8
11
Other
11%
SE Asia
N. Europe 9%
7%
Discovery
Country
Field Operator
EXAMPLES OF FPSO
PROJECTS IN THE
PLANNING STAGE
Estimated
Production Start
(meters)
Africa
Blk 32 -- Kaombo GG
Bonga Southwest
Nsiko
Elephant
Bobo
Water
Depth
Angola
Nigeria
Nigeria
Congo
Nigeria
Total
Shell
Chevron
CNOOC
Shell
1600
1200
1768
550
2480
2016/17
2017/19
2018/20
2020/25
2020/25
Brazil
Oliva/Atlanta BS-4
Carioca BM-S-9
Carcara BM-S-8
Espadarte Module III
Libra Complex
Franco Leste
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Queiroz Galvao
Petrobras
Petrobras
Petrobras
Petrobras/ANP
Petrobras
1560
2150
2027
750
2200
1800
2017/19
2016
2018
2020
2020/25
2019
Other Regions
Ayatsil/Tekel
El Perdido
Kraken 9/2b
Gohta
Sea Lion
Belud
Bunga Dahlia/Teratai
Ubah
D-56
Mexico
Mexico
UK
Norway
Falklands
Malaysia
Malaysia
Malaysia
India
Pemex
Pemex
EnQuest
Lundin
Premier
Hess
Petronas
Shell
BP/Reliance
115
2500-3000
100
342
450
155
65-70
1430
1743
2016/18
2018/22
2016/17
2020/25
2018/20
2015/16
2016/18
2018/20
2019-22
LOCATION AND TIMING OF
VISIBLE FPSO PROJECTS
Likely Production
Start
Number FPSOs
Required
Visible
Projects
2014/20
2020+
2014/20
2020+
Africa
33
17
16
17
16
Australia/NZ
1
1
0
1
0
Brazil
51
29
22
29
36
Canada
2
0
2
0
2
China
1
1
0
1
0
Gulf of Mexico
6
4
2
4
2
Mediterranean
3
3
0
3
0
N. Europe
Other So. Amer
8
3
7
3
1
0
7
3
1
0
SE Asia
11
11
0
11
0
SW Asia
4
3
1
3
1
123
79
44
79
58
Global Total
PROCESSING PLANT CAPACITY IN
VISIBLE FUTURE FPSO PROJECTS
(b/d in 000’s)
<50 b/d
50-100 b/d
29
14
Gas
10
4
44
100-150 b/d
• 58% require topside plants with
100,000 to 200,000 b/d oil
processing capability
200+ b/d
• 21% require topside plants with
50,000 to 100,000 b/d capacity
• 10% involve small FPSOs with
less than 50,000 b/d plants
36
150-200 b/d
• 3% are mega- FPSOs with more
than 200,000 b/d processing
capacity
• 7% are primarily gas FPSOs
BREAKDOWN OF PROCESSING CAPACITY REQUIRED FOR
VISIBLE FUTURE FPSO PROJECTS
(b/d in 000’s)
FPSOs Required Between 2014-2020
50 to 100 to 150 to
<50 b/d 100 b/d 150 b/d 200 b/d 200+ b/d
Africa
5
Australia/NZ
1
Brazil
2
7
2
15
9
2
FPSOs Required 2020+
Gas
50 to
100 to
150 to
<50 b/d 100 b/d 150 b/d 200 b/d 200+ b/d Gas
1
5
5
4
3
3
12
21
Canada
1
1
2
China
1
Gulf of Mexico
2
Mediterranean
2
N. Europe
2
Other So. Amer
1
1
1
1
1
5
1
3
SE Asia
6
SW Asia
2
Global Total
14
2
1
2
1
19
24
11
3
8
1
0
10
20
25
1
2
WHAT WILL DRIVE THE PACE OF FUTURE
FPSO ORDERS?
 Underlying market conditions
 Smaller FPSOs for marginal fields are influenced by near term oil price
expectations and availability of financing
 Large FPSOs intended for major developments tend to be less sensitive
to oil price and financing
 Passing the FID hurdle
 But even the biggest oil company has to make choices -- there are
budget constraints and limits on available personnel to manage project
implementation
 Whether an FPSO project gets into the CAPEX plan depends on its
ranking in terms of expected return on investment
 This will be determined by the project economics – and the economics
of other investment possibilities
MARCH 2013 FORECAST OF FPSO ORDERS
OVER THE NEXT 5 YEARS
Most Likely Forecast Assumptions
Forecast
next 5 years
130
Actual
110
past 5 years
76
90
 Global economic growth averages 3
to 4 percent annually over next few
years
 Oil demand growth remains around 1
percent per year
 Mideast tensions continue, but no
major oil supply interruption
 Oil price expectations hover in $90 to
$110 range
 Some cost growth and delivery
bottlenecks in the FPSO supply base,
but not enough to slow major project
starts or erode contractor profits
No. Orders
2008/12
Low
Forecast
Most
Likely
High
Forecast
No. Orders 2013/17
 No major environmental incident
involving an FPSO
 No major impact from shale oil on
deepwater investment
ASSUMPTIONS UNDERLYING THE
HIGH AND LOW FORECASTS
Low Forecast Assumptions

China and/or India economies falter,
Europe/U.S. economies continue to stagnate
over next few years
High Forecast Assumptions

Global economic rebound accelerates quickly
from 2013 onward, rises to 4 %+ per year

Oil demand growth tracks upward with
economic growth

Mideast tensions grow, oil supply interrupted

World GDP growth turns downward

Global oil demand growth falls as economic
activity and world output slows

Shale oil and/or tight oil projects meet
worldwide opposition, delaying project starts

Tight oil, shale oil finds grow internationally,
technology advances lower cost

Many unconventional onshore fuel projects
encounter continuing logistics constraints

Oil price expectations fall to $70 to $90
range, negating commercial viability of many
visible marginal floating production projects

Oil prices spike to $150+ and expectations
remain above $120, making most visible
marginal floating production projects
commercially viable

Contractors experience supply constraints,
raising costs, creating delivery delays

Little cost growth, few delivery constraints in
the floater supply chain
THE LOW END OF THE MARCH FORECAST IS
NOW LOOKING MORE LIKELY
• Portfolio of potential FPSO projects has been
growing
• But new project starts have slowed – 9 FPSOs have
been ordered thus far in 2013, an average of 1
order/month
• Cost growth, access to financing, market barriers,
other issues seem to be creating barriers
• We now see the low end of the forecast range – i.e.,
~90 FPSOs – as the most likely forecast of FPSO
orders
ISSUES
 Local content requirements are
 Creating market entry barriers and limiting
competition
 Raising costs – e.g., Egina FPSO $3.1 billion!
 Clogging the supply chain
 Shale oil/tight oil growth is a threat to deepwater
 Added supply could result in lower oil prices
 Shale oil projects could draw investment resources
from deepwater
 Deepwater costs are increasing – shale oil/tight oil
cost are falling
Thank You
If you would like to discuss any aspect of
this presentation or get further details on
the FPSO market, please contact
Jim McCaul
[email protected] or
1 202 333 8501
Our website has further information that
you may find useful. Please give us a visit.
www.imastudies.com
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