FPSO financing still plaguing the industry

May 26, 2010 - PRLog -- Johan Gardin, Senior Principal Surveyor and Director of Offshore Classification, for DNV, believes the main challenges of harsh weather lie in maintaining uptime and avoiding damage. “Uptime is threatened for example by forced disconnection and by motions affecting the process or making maintenance and repair difficult. Damage by green seas is well documented from the North Sea and will impact most on forward structures but also further aft by 'climbing waves',” said Gardin.

For FPSOs, a good hull design is also key to combating the harsh weather conditions.  “If the hull design is unfortunate, seasickness may make life on board very difficult. Needless to say, a good hull design and a robust mooring system is required and there are specialists in this field, in particular suppliers of STL solutions. Green sea damage can be mitigated by simple structural strengthening and barriers, although the raw force of the sea seems to be hard to appreciate from within a designer's cubicle,” he added.

Despite the challenges faced when it comes to the harsh and erratic weather conditions that FPSOs are facing, less than a quarter of those polled believe that the activities in the industry are decreasing in 2010 and 2011.  

Of all the respondents, 77% seem to share, Tony Mace, CEO of SBM Offshore’s view that activities in the next two years will be increasing. Mace was reported saying that the FPSO outlook is improving for the year 2010.

“Mace says there is potential for five total FPSO awards by the end of this year, which is up from zero during the previous year or so. About 78 FPSO projects are possible in the next 5-10 years,” said Mace in Monaco last year.

Gardin agrees with Mace acknowledging that in 10 years' time, FPSO numbers will probably be at its peak. “The current economics will only affect the industry momentarily; there is still oil and gas in the ground and we have no big-time alternative, so it's both ‘find and develop the fields' or 'park the car permanently',” he said.

And despite Gardin and Mace predicting a prosperous future for the FPSO sector the main challenge that continues to haunt the sector much like the much maligned shipping sector is financing with 42.2% of the respondent finding it a challenge. Joe Patrick, Director of Hunter Oil probably sums it up best, “The economics of the FPSO contractors (from) making a profit to the ability to raise capital to fund projects is probably one of the most challenging aspects for FPSO’s.

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The topics and challenges mentioned above will be addressed at the 11th Annual FPSO Congress 2010. For more information on the congress please email Bryan Camoens at bryan.camoens@iqpc.com.sg or visit www.fpsoasia.com .

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