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The FPSO market is growing: these are the projects to watch in 2019

14/12/2018
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Since the 2014/15 oil price crash the FPSO market has been despondent, but from early 2017 when exploration and production activity began again at a meaningful scale, and major discoveries started to be announced, the FPSO market has been recovering.

With recovery, comes jobs.
The FPSO Adolo recently achieved first oil at the massive Tortue project off the coast of West Africa.
(Image via BW Offshore).

FPSO market growth

2017 saw six new FPSO orders worldwide. 

2018 has proven to be even better with 11 FPSO awards already made (according to Energy Market Associates), and it’s set to continue. 

According to the 2018 Worldwide Survey of Floating Production Storage and Offloading (FPSO) Vessels, compiled by Wood, Offshore Magazine and several other contributors, the FPSO market as a whole grew from 178 operating vessels at year-end 2017, to 183 vessels either operating or slated to reach first production by the end of 2018.

We’d expect 2019 to look even more positive.

According to research by analyst firm Rystad Energy, more than 30 FPSO projects could pass final investment decisions (FID) during 2019-2021. This is linked to global growth in demand for drilling and well services, with a total of more than 72,000 wells set to be drilled and completed in 2019, up 3% on 2018.
Rystad Energy's analysis of projects planned to be committed 2019-21 that feature FPSOs.
One of the factors in the growth of FPSO projects being sanctioned is a renewed emphasis by operators to cut the costs of projects, improve productivity and maintain lower operating overheads. The result is improved break-even levels for many of the planned FPSO projects. Of the 30 projects that could reach FID by 2021, fourteen have a breakeven of less than $50/bbl, fifteen breakeven between $50 and $70/bbl, with only three of the projects having breakevens of more than $70/bbl.
The proposed design for the Penguins field FPSO.
(The proposed design for the Penguins field FPSO. Image via Sevan Marine).

A closer look at planned FPSO projects

Before you read further, please note that this is by no means a comprehensive list of all the FPSO projects within the 2019-2021 timeframe (given the variables of the oil price market project sanctions are always fluctuating), but it should give you an idea of the direction of the FPSO market and the job opportunities associated with it.


UK & Europe

In UK waters we’ve already seen FIDs on two FPSO projects, the first of which being Shell’s Penguins project which will utilise an FPSO constructed by Fluor. The second FPSO project in UK waters to have received FID is Alpha Petroleum’s Cheviot project which will see the redeployment of the Petrojarl Varg FPSO by Teekay Offshore.

Other UK and Europe FPSO projects include:

  • Crondall Energy has been appointed by Siccar Point Energy to examine the use of either a newbuild or redeployment of conversion FPSO for the Cambo field off the coast of Shetland.

  • Bridge Petroleum has indicated that it may convert an ice-class Aframax-size tanker to exploit its Galapagos project.

  • The Johan Castberg project offshore Norway is a sizeable discovery with an estimated 558 million barrels of oil. With planned production expected to start in 2022 Equinor have commissioned what will be their largest ever FPSO to process oil from the field. Singapore’s Sembcorp Marine has secured the contract from Equinor to build the hull of the FPSO for the Johan Castberg field.
  • The FPSO Pioneiro de Libra in transit to Brazil.
    (The FPSO Pioneiro de Libra in transit to Brazil. Image via Teekay).

    South America

    According to many analyst companies, South America, in particular Brazil, will be a key driver of the FPSO market over the next five years. Particular note should be taken of the spending plans recently laid out by Petrobas. 

    In these plans Petrobas plans to spend $84.1 billion over 2019-2023, of which $68.8 billion will be spent on its exploration and production business. The plans include putting 13 FPSOs in production, of which seven are still to be built (these later FPSOs will be put into production between 2021 and 2023).

    Projects of particular note across South America that will utilise FPSOs include:

  • Libra- the Libra oil field is one of the most significant oil and gas discoveries in recent years. Situated around 110 miles off the coast of Rio de Janiero, the field could hold as many as 12 billion barrels of oil. The FPSO Pionero de Libra is currently operating the field as an early production system (EPS).

  • Mero- the Mero field is situated around 180 kilometres off the coast of Rio de Janiero in ultra-deep waters. First oil is expected from this field in 2021, and will involve the use of the Guanabara MV31 FPSO, which is capable of processing 180,000 barrels of crude oil per day.
  • The Adolo FPSO which is operating the Tortue field offshore West Africa.
    (The Adolo FPSO which is operating the Tortue field offshore West Africa. Image via BW Offshore).

    Africa

    Africa is enjoying something of an oil boom with several major offshore projects really gaining traction through 2018 and into 2019. FPSO projects of note include:

  • Cairn Energy’s deepwater SNE project which will entail the use of a large FPSO. A FID on the proposed FPSO is expected within the first half of 2019 according to an analysis by Rystad.

  • Aker Energy’s Pecan field in the DWT/CTP block offshore Ghana is expected to be developed via a purpose-built FPSO.

  • Shell’s Bonga South-West project in Nigeria is likely to utilise a newbuild FPSO.

  • BW Offshore’s Adolo FPSO achieved first oil from the massive Tortue field off the coast of West Africa in late September this year.

  • At the tip of the African continent, Australian company Sunbird Energy and its local partner the national oil company PetroSA, is considering using an FPSO to develop the Ibhubesi gas field offshore the west coast of South Africa. Commitment to develop the FPSO is expected at some point in 2020.
  • Visualisation of the subsea umbilical systems which will be used as part of the development of the Liuhua oil fields in the South China Sea.
    (Visualisation of the subsea umbilical systems which will be used as part of the development of the Liuhua oil fields in the South China Sea. Image via Aker Solutions).

    Asia

    Across Asia there are several planned FPSO projects during 2019-20 although a few have encountered some hurdles. Here are some of the most noteworthy FPSO projects from across the region:

  • In Malaysia, Petronas is expected to formally prequalify contractors for an FPSO for the Limbayong field which lies within the Sub-Block of Block G, in water depths of between 900 and 1200 metres. As reported by upstream online partners understood to be operator Petronas on 90% and its subsidiary E&P Malaysian Ventures on 10% and international bidders have been contacted in addition to local players.

  • In Indonesia, Santo’s Ande-Ande Lumut (AAL) project in the NW Natuna Sea which holds 107 mmboe, was expected to be developed by an FPSO but has been continually delayed due to a low-price environment. According to research from the FPSO World Congress, this FPSO could receive FID in 2020.

  • CNOOC’s development of the Liuhua oil fields in the South China Sea, off Hong Kong, will be undertaken by an FPSO built by Beihai Shipbuilding at a cost of approximately $97.5m.
  • The Barossa FPSO will develop gas and light condensate resources offshore Northern Territory, Australia.
    (The Barossa FPSO will develop gas and light condensate resources offshore Northern Territory, Australia. Image via ConocoPhillips).

    Australia

    Australia continues to develop its natural gas resources via FPSO facilities, with a projects of note including:

  • Barossa- led by ConocoPhillips and co-venturers SK E&S Australia and Santos Offshore, the Barossa project seeks to develop gas and light condensate resources which are located around 300 kilometres north of Darwin, Northern Territory. The development of the project includes an FPSO facility which entered the FEED phase in April 2018.

  • Greater Enfield- the Greater Enfield project is a $1.9 billion undertaking which is expected to achieve first oil in mid-2019. The project will develop the Laverda Canyon, Norton over Laverda and Cimatti oil accumulations using the Ngujima-Yin FPSO facility located over the Vincent oil field. 

  • Equus- the Equus project comprises 11 gas and condensate fields in the Carnarvon Basin, about 200 kilometres north-west of Onslow in Western Australia. Resources are estimated at more than 2 tcf (trillion cubic feet) of gas and 42 million barrels of condensate. Western Gas acquired the project from Hess Corporation in November 2017 and will likely be proceeding with the commissioning of an FPSO capable of processing 325 million metric standard cubic feet per day (Mmscfd), with integrated gas and condensate processing, and gas compression facilities.

  • As stated above, this is by no means a comprehensive list of ALL the FPSO projects that could achieve FID in 2019 or beyond, however it does provide a clear illustration that the FPSO market is making a strong recovery following its recent period in the doldrums. 

    The recovery of the FPSO market will naturally bring with it significant job creation across every aspect of FPSO design, engineering, fabrication, operation and maintenance.
    FPSO projects offer a wide range of technical and non-technical job opportunities.
    FPSO job opportunities

    The sheer scale and complexity of FPSO projects means that there are hundreds of different job opportunities available to experience professionals across both technical and non-technical disciplines.

    Here are just a few examples of the types of jobs that we are actively recruiting for now on FPSO projects across the globe:

  • Engineering Manager (Major Projects).

  • Head Turret, Mooring and SURF Engineering.

  • Head Marine (Major Projects).

  • Principal Estimator.

  • Principal Production Systems.

  • Principal Gas Systems.

  • Lead Proposal Coordinator.

  • Lead Subcontracts.

  • Lead QA.

  • Telecom Designer.

  • PDMS Administrator.

  • So, with 2019 set to be a positive year for FPSO projects, now’s the time to take the next step in your career and secure a new job.

    Fircroft is recruiting for a wide range of FPSO jobs across the world. Apply now!

    Fircroft: the first and last stop for FPSO jobs

    Fircroft has been supporting major projects across the global oil and gas industry since 1970, and FPSO projects are no exception. Fircroft is currently recruiting for jobs right across the project lifecycle of FPSOs from design and engineering through to fabrication, operation and maintenance as well as back-office and commercial positions. Register your interest now, and explore our current FPSO vacancies.
    Tags: Oil & Gas
    Recent Comments
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    I'm available now to take up any E&IT,IECEX,EX OR EEHA construction related supervision and inspection jobs on any FPSO or process modules . Thank you
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    I'm Interested in FPSO Commissioning opening.
    Vikas Patel, 11 January 2019
    I am interested in engagement on another FPSO project after working in South Korea as senior project engineer, turret delivery manager, topsides engineering task team leader, hull engineering task team leader & engineering manager. I also have experience in construction, mechanical completion and commissioning in management roles.
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    I am very interested to be a part of another FPSO project, I have a strong background in Instrument and Controls- QC, construction and commissioning either in Hull/Marine, Topside and Turret.
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    Alaudin, 18 April 2019
    Hi Sir, Pls post Piping Engineer and Site Field Project Mechanical Engineer role to me in Topside FPSo modules
    Sivakumar Balasubramanian, 24 May 2019
    Hi I am very interested to be a part of another FPSO project, i have strong knowledge in Marine and offloading system, hull/turret/mooring.PSA,NORSOK,NMA, DNV....... More than 25 years exsperience in the marine, oil and gas industry Brgds Svein Aarvik 18 June, 2019
    Svein Aarvik, 18 June 2019
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    The FPSO market is growing: these are the projects to watch in 2019 - Time to read 9 min
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