Offering solutions 2 value

FPSO Revamp for a Marginal FieldWA Oil & Gas Facilities Group, August 2012F. Piasentin

Introduction

S2V provides strategic advice to Oil & Gas Clients

Deliver solutions that add value by adopting a holistic approach 

Review of projects allows S2V to identify insights and transfer knowledge to our Clients 

FPSO Revamp for a Marginal Field 2

Overview

+ FPSOs as a Development Concept► What is an FPSO?► Why an FPSO?

+ FPSO Case Study► Project Overview► Scope of Work► Contracting Strategy

+ Conclusions & Lessons Learned+ Q&A

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What is an FPSO?

Floating Production Storage and Offloading unit+ Processes oil, gas and water+ Equipped with production facilities of varying complexity

+ May be new build or conversion+ May be spread or turret moored

► Turret may be disconnectable

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Key FPSO Components

FPSO Revamp for a Marginal Field

Moorings

Risers

Turret and fluid/control transfer swivel

Process and Utilities

Storage and Marine Utilities

Accommodation, CCR, Helideck

Offloading Facilities

5

Why an FPSO?

+ Self‐contained facilities+ Overcomes limitations of a fixed structure+ Operates without export liquids pipeline network + Re‐locatable / Re‐usable+ Relatively insensitive to additional payload+ Can be new built or converted from existing tanker

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FPSO Concept Features

+ Additional marine equipment increases OPEX+ Modular topside facilities+ Turret systems can constrain expansion+ No drilling facilities+ Requires sub‐sea wells and facilities

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FPSO Complexity

FPSO Revamp for a Marginal Field

Regional Challenges (met‐ocean and regulatory)

Facility prod

uctio

n capa

city

200k+ BOPD

Injection/export; water & gas

10k BOPD –no gas

West Africa               SE Asia             Brazil               Australasia                    GoM North Sea

Purpose built high spec vessel with complex high throughput process equipment

Purpose built high spec vessel with complex high throughput process equipment

Simple low cost / low tech tanker conversions  & life extension

Simple low cost / low tech tanker conversions  & life extension

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Why are FPSOs so important

+ Technology of choice for deepwater oil developments+ Economic solution for exploitation of marginal fields and spread reservoirs

+ Concept also applicable for gas production (FLNG)+ Fast execution schedule+ Lease possibility – reduced upfront CAPEX

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FPSO market in 2011

South America21%

West Africa25%

North Sea15%

SE Asia23%

Australasia11%

Other5%

Worldwide Distribution of FPSO Vessels

FPSO Revamp for a Marginal Field

Conversions62%

Newbuilds38%

Contractor Owned 57%

Operator Owned 43%

Source: Offshore Mag. – “Worldwide Survey of FPSO Units”, August 2011

Total of 158 producing vessels:

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PROJECT OVERVIEWFPSO Case Study

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FPSO Project Framing

+ Max Oil Production 40,000 BOPD+ Subsea field layout composed of 3 wells+ Location Australasia, ~350 m water depth+ Processing of the incoming fluids: Oil Separation and Stabilisation, Gas Dehydration and Compression

+ Use of the process gas for fuel and gas lift+ Crude storage + Export metering facilities+ Offloading to a tandem moored shuttle tanker

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FPSO Key Specs and Field Layout

+ Conversion of an existing FPSO vessel + Tanker built 1996 (operated on two previous fields)+ 105,000 DWT tanker, 240 m length, double hull+ Internal fixed turret+ Mooring: 3 x 2 wire lines+ Driven anchor piles+ Hull storage 500,000 bbls+ 3+3 Production & Gas Lift Risers+ 1 Control Umbilical & InfieldsFPSO Revamp for a Marginal Field

Well 1 Well 2 Well 3

Risers

Umbilical & Infields

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Project Drivers

+ Schedule  Strategic Project+ Marginal field requires managed budget to ensure economics are met 

+ Ensure execution and operational safety+ Meet Local Content Requirements

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Execution Timeline

+ Preliminary FDP – May 2009+ FPSO Contract Award – December 2009+ FDP Approval – February 2010+ Start of Construction Activities – May 2010+ End of mooring installation – March 2011+ Sail away – June 2011+ FPSO Mooring Hook‐up – July 2011+ Subsea Hook‐up completion – October 2011+ Start‐up – October 2011FPSO Revamp for a Marginal Field

30months

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SCOPE OF WORKFPSO Case Study

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FPSO Execution Works Overview

EPC Leased Contract including:+ Repair & Life Extension (RLE)+ Conversion works+ Mooring system design, supply and installation+ Hook‐up, Commissioning and Start‐up+ Operations and Maintenance 

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RLE Scope

+ Predict overhauling scope and risks+ Input from maintenance database and operations+ Additional Works Instructions (AWI) had to be issued

FPSO Revamp for a Marginal FieldFPSO Revamp for a Marginal Field 18

0%10%20%30%40%50%60%

RLE Conversion AWI

40%60%

25%Yard M

an‐hou

rs

Original Contract Additional Scope

RLE – Main Activities

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RLE AWI

Main bearing exchangeSwivel de‐stack, seal change out, reinstatement and testSwivel reactivation

Preparation of turret deckhouse

Gas Compressors overhaul Machining of Gas Compressor heads

Valves inspection and overhaul/replacement

Extra Valves overhaul scope: PRVs, ESDV, BDV

Marine and Topsides Boiler Repairs

Pressure vessels inspection/upgrade

Inspection and modification chain stopper

Electric motors overhaul

Coating FPSO TanksSwivel de‐stack

Conversion Scope

TurretSide Impact

Gas Dehy.

Booster Gas Co.

MeOH Skid

Metering Unit

Offloading

ICS Upgrade

FPSO Revamp for a Marginal FieldFPSO Revamp for a Marginal Field

Main Conversion Items

FPSO Revamp for a Marginal Field

Gas Dehy.

Booster Gas Compressor

MeOH Skid

Bearing Exchange

Metering Skid

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Dry-dock Activities

FPSO Revamp for a Marginal Field

Spider Upgrade

Dry‐dock blocks

J‐tubes Installation

Side Impact Protection

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Docking sequence

Mooring Installation

+ Campaign #1 (Mooring Installation) + Campaign #2 (FPSO Hook‐up)+ Reduce risks related to delays

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Main Technical Challenges

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Challenge Action

Additional RLE scope First yard month to complete RLE surveys Additional scope to external Contractors

Long Lead Items Procurement Maximized equipment modularization Aggressive expediting campaign

Migration of the new ICS system Full ICS scope contracted to a specialistBroad pre‐testing campaign

Gas Compressors refurbishment and commissioning

Early involvement of Vendor Overhauling works at Vendor’s HQ

Swivel leakage Split scope Swivel de‐stacked involving Vendor

Dry‐dock height  Early Yard involvement 5.2 m blocks

HSE and Quality Assurance

Joint effort between Operator and Contractor + Systematic HSE and QA Audits+ HAZIDs and HAZOPs held throughout the execution involving all stakeholders

+ Monitor compliance to HSE requirements in yard+ SIMOPS workshop held prior to installation phase+ Never put schedule requirements ahead of safetyWhat was achieved+ 1 million man hours over 14 months with zero LTIs

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CONTRACTING STRATEGYFPSO Case Study

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+ Project Management based on Package breakdown+ Each Package related to a specific contract / budget+ Packages with independent teams+ Criticality of Interface management+ Define clear scopes and battery limitsWhy this approach?+ Select best Contractors/Prices+ More control to the Operator+ Different execution phasing

Packaged Project Approach

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Fast-Track Contracting Structure

FPSO Revamp for a Marginal Field

Project Management

Turret & Mooring

Hull & Topsides

Flowlines

Subsea Equipment

FPSO Installation

Concep

t

Definition

Detail D

esign

Procurem

ent

Constructio

n

Hoo

k‐up

Comm.

Start‐up

Ope

ratio

ns

Operator

Operator

FPSO Contractor

Subsea Contractor

Flowlines Contractor

FPSO Contractor

Operator

Operator

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ITT/Tender Lump Sum + LDs upon Notice MechanismFixed Day Rate + Reimbursable 

Services

Operator’s FPSO Package Team

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FPSO Package Team

Develop contractual technical specs

Tender review

Contract Management

Detail Design review

Construction supervision

Logistics expediting

Monitor Contractor’s performance

Assist interfaces with other Packages & Contractors

Offshore support

Handover to operations

LESSONS LEARNEDConclusions

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Lessons Learned - Negatives

+ Unexpected additional RLE works  Hard to monitor on schedule (fragmented scope + knock‐on effects)

+ Yard contract held by Contractor  Operator had no contractual leverage to increase resources

+ Piping Fabrication / Construction performance+ Poor yard quality required increased Contractor supervision

+ Management of Reservoir / Operations input Source of the main design variations

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Lessons Learned - Positives

+ Conversion implies balance between scope compliance and schedule  Flexibility

+ Technical documentation finalized during tender phase (+ tailoring)  Avoid Variations and Delays

+ Apply no change policy  Freeze Design+ Close review of the Contractor  No Turnkey / over reliance on EPC Contractor

+ Contract structure with Operating fees energises Contractor’s performance

+ Strong interaction with Governmental AuthorityFPSO Revamp for a Marginal Field 32

Lessons Learned - Positives

+ Clear role division between Operator and Contractor+ Single Contract for the FPSO+ Interface Management based on direct information exchange between Contractors

+ Maximize facilities modularization+ ICS intense pre‐testing minimized integration issues+ Outsource additional scope not to overload yard+ Onshore commissioning on FPSO Contractor

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QUESTIONS?Any

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