Abstract_FPSO_Market..

THE FPSO
MARKET REVIEW
2014
A Certainly Uncertain World
CONTENTS
PART A: The Participants Outlook
Introduction
List of Diagrams
List of Tables
List of Pictures
Section 1
1
1.1
1.2
1.3
1.4
1.5
1.6
Section 2
2
2.1
2.2
2.3
2.4
2.4.1
2.4.2
2.5
2.5.1
2.5.2
2.5.3
2.5.3.1
2.5.3.2
2.5.3.3
2.6
2.6.1
2.6.2
2.6.3
2.6.3.1
2.7
2.7.1
2.7.2
2.8
2.8.1
2.8.2
2.8.3
2.8.3.1
2.8.3.2
2.8.3.2.1
2.8.3.2.2
2.8.3.2.3
2.8.3.2.4
2.8.3.2.5
2.8.3.2.6
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4
5
Oil Market Analysis
Past Year Performance
Technical Analysis
The Spread between WTI and Brent
Oil Market Participants
Oil Industry Estimations
Conclusions
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FPSO Vessel Analysis
Regional / Field Analysis
Future Projects
Idle Units
FPSO Cidade de Sao Paulo
Vessel Characteristics
Field Characteristics
FPSO Cidade de Itajai
Vessel Characteristics
Field Characteristics
Technical Details
Oil Production Train
Mooring System
Seabed Configuration
FPSO Armada Sterling
Vessel Characteristics
Field Characteristics
Technical Details
E-house Package
FPSO Voyageur Spirit
Vessel Characteristics
Field Characteristics
FPSO Cidade de Paraty
Vessel Characteristics
Field Characteristics
Technical Details
BSR Risers
Gas Condition/Compression Systems
Detailed Analysis
Rotordynamic Stability
Rotordynamic Modelling
Stability Predictions
Stability Test Setup
Stability Test Results and Comparison with Predictions
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2.9
FPSO Montara Venture
2.9.1
Vessel Characteristics
2.9.2
Field Characteristics
2.10
FPSO OSX-3
2.10.1
Vessel Characteristics
2.10.2
Field Characteristics
2.11
FPSO P-63 Papa Terra
2.11.1
Vessel Characteristics
2.11.2
Field Characteristics
2.11.3
Technical Details
2.11.3.1
Wartsila’s 50DF
2.11.3.1.1
Fuel Flexibility
2.11.3.2
Technip’s IPB
2.11.3.3
Cathelco’s ICCP
Editor’s Note
Platforma Project Development
Disclaimer
PART B: The Investors Outlook
SUPPLEMENT 1
1
1.1
1.2
Platforma ’s “Offshore Oil Industry Index”
Platforma ‘s “Offshore Oil Industry Investing Facility”
Offshore Oil Industry Investing Facility Performance
SUPPLEMENT 2
2.1
2.2
SBM Offshore company report
SBM Offshore stock market valuation
SUPPLEMENT 3
3.1
3.2
MODEC company report
MODEC stock market valuation
SUPPLEMENT 4
4.1
4.2
BW Offshore company report
BW Offshore stock market valuation
SUPPLEMENT 5
5.1
5.2
Teekay Petrojarl company report
Teekay Petrojarl stock market valuation
SUPPLEMENT 6
6.1
6.2
Bumi Armada company report
Bumi Armada stock market valuation
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INTRODUCTION
President Kennedy during a speech in Cape Town in June 1966, stated the
following:
“There is a Chinese curse which says 'May he lives in interesting times.' Like
it or not we live in interesting times. They are times of danger and uncertainty;
but they are also more open to the creative energy of men than any other time
in history.”
Those words although some 50 years old describe precisely the current
outlook of the offshore oil industry. Our world remains on a fragile path ailing
to achieve robust growth and there is uncertainty almost in every aspect of the
economic environment. Even China doesn’t look like the Asian tiger it used to
a few years ago. The offshore oil industry however remains one of the most
dynamically growing sectors performing remarkably. Consistent to Kennedy’s
words, the industry has demonstrated innovative and creative thinking and
through revolutionary technological breakthroughs has expanded oil
Exploration and Production to places beyond any imagination a few years
ago. But the economy behaves cyclically and now, more than ever, a growing
part of industry participants is trying to identify where the sector actually lies.
As a result, through this year’s Annual Report Platforma wishes to participate
in the effort to identify this position and support offshore oil industry
participants’ strategic thinking and planning. The report is quite different than
the one published a year ago. Besides, the whole Project of Platforma altered
its identity significantly the previous year. It is divided in two parts. Part A “The
Participant’s Outlook” addresses mainly to individuals actually and directly
involved in the offshore oil industry and is also divided further in two sections.
The first section, the “Oil Market Analysis” is a comprehensive study of the oil
market. In this section past year’s performance of oil market is described and
through Technical Analysis Tools patterns and trends are investigated. It
should be stated at this point that the end of 1H of 2014 evolves as a very
interesting period that could be marked by significant changes in the price of
oil, especially Brent. Further in this section, the spread between Brent and
WTI is analyzed in depth and the size, the distribution of participants and the
efficiency of oil market and its derivatives is described in detail. Additionally oil
industry data through reports, presentations and estimations are presented in
order for the reader to obtain a total view of the oil market and the offshore oil
industry. The section concludes with some very interesting remarks of what
offshore oil industry participants could anticipate in the near future and
proceeds to the provision of certain actions that could be taken in the effect of
a negative scenario rising.
In the second section of Part A, “The FPSO Vessel Analysis” the report
provides an in depth analysis of the FPSO fleet. Data of vessels in operation,
decommissioning and first oil and the outlook of the market for FPSOs in
general are presented. The report demonstrates trends in the vessel origin
(construction – newbuilding), in the vessel ownership (lease – own) and
identifies key points of the market, for example the constant deepening of
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fields being developed. A first glance to some key players of the FPSO
industry is stretched in this section, like Petrobras and generally Brazil, and
what is their influence in the vessel supply and demand. Idle units are being
recorded and the process of idling and redeploying units is described further.
The report also tries to identify future projects which are expected to fulfill the
process and reach the operational status. About 19 units are in advanced
phases and are expected to achieve first oil sometime between 2014 and
2016 in various places of the world. Finally a very detailed description is
provided for the FPSOs that achieved first oil during 2013. Technical
information for the projects, contractual and sub-contractual activity and cost
whenever disclosed, data of the oil fields and their development process are
presented. In addition selected specialized information for certain technical
challenges that were addressed during the application of the projects are
provided aiming to support participants with examples of challenges and
solutions across the industry.
Part B is quite a different story. In this Part “The Investor’s Outlook” Platforma
wishes to provide financial data for the sector and some of its key players.
The main objective of this approach is to facilitate third parties and entities
outside the offshore oil industry to gain a view of the sector, its potentials, its
performance and how an individual, through an investing position, can get
involved in the offshore oil industry. Part B will be applied through
Supplements. Supplement 1 presents for the first time one of Platforma’s
subproject that hasn’t been disclosed till now. The Platforma‘s “Offshore Oil
Industry Investing Facility” and Platforma’s “Offshore Oil Industry Index”.
Through these products Platforma created an investing vehicle for the
potential investor and provided a mean for financial outcomes directly from
the offshore oil industry. The Index and the Facility involve companies across
the whole Upstream chain and confirm loudly that the two past years were
very profitable for the potential investor. Supplements 2-6 provide financial
data for some key FPSO Operators, their performance and investigate fair
stock market valuation of the Operators’ shares.
Platforma through this report wishes to provide a helpful instrument of the
offshore oil industry, a Tool with guidelines for industry participants and an
investing manual for the investors’ society. It hopes to support decision
process of every individual that already possesses or wishes to acquire
stakes in this specialized and fascinating industry. Enjoy your journey.
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List of Diagrams
Diagram 1:
Diagram 2:
Diagram 3:
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Diagram 5:
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Diagram 9:
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Diagram 11:
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Diagram 18:
Diagram 19:
Diagram 20:
Diagram 21:
Diagram 22:
Diagram 23:
Diagram 24:
Diagram 25:
WTI price index movement
Brent price index movement
Historical Prices of WTI and Brent
Long term trend for Brent
Short term trend for Brent
Long term trend for WTI
Short term trend for WTI
Spread between WTI and Brent in dollars
Historical performance of spread between WTI and Brent
Spread between WTI and Brent as percentage of their mean
Average daily open interest in crude oil futures on US
exchanges
World Petroleum and other liquids production 2010-2040 mbpd
Liquids demand per region
Global Upstream Capex
Demand Growth against Field Depletion
Petrobras Upstream CAPEX
North Sea drilling activity
GoM drilling activity
Rising cost of E&P per barrel
Newbuildings / Conversion FPSO vessels
Leased to Owned FPSOs
Country contribution in the global FPSO fleet
Number of fields commissioning with FPSOs per depth
New FPSOs per region
New FPSOs per time of expected first oil
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List of Tables
Table Νο 1:
Table Νο 2:
Table Νο 3:
Table Νο 4:
Table Νο 5:
Table No 6:
FPSOs that ceased oil production during 2013
FPSOs that produced first oil during 2013
Economics of 2013 commissioning FPSOs
New producing vessels (additions) per region – per year
Idle FPSOs as of end of 2013
Predicted stability per bearing clearance
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List of Pictures
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Picture Νο 2:
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Picture Νο 29:
Picture Νο 30:
FPSO Cidade de Sao Paulo off the beach of Angras dos
Reis, Brazil
FPSO Cidade de Sao Paulo local content analysis
Sapinhoa Oil Filed (BM-S-9)
Sapinhoa (Guara) field development (accomplished and
forecasted in 1Q 2013)
FPSO Cidade de Itajai during trials at Jurong shipyard,
Singapore
Schematic of the oil production train aboard the FPSO
Cidade de Itajai
Schematic of the FPSO Cidade de Itajai mooring system
Bauna and Piracaba fields wells configuration
FPSO Armada Sterling during mooring to final
anchorage
FPSO Voyageur Spirit during conversion work at Nymo
shipyard
Huntington oil field
Huntington oil field wells
FPSO Cidade de Paraty during conversion at Keppel
Shipyards
FPSO Cidade de Paraty local content analysis
FPSO Cidade de Paraty modules construction and
integration at BrasFels Shipyard
Field development (Accomplished and Forecasted in 1Q
2013)
Lula Field (including NE) production
General schematic illustrations of BSR Risers
Lula field applied BSR Risers
Schematics of gas administration
Test results of the ASME PTC-10 Type 1 test
Rotordynamic stability example
Magnetic Bearing Exciter configuration
Shaft extension
Stability with discharge pressure performance
Log dec measurements with different discharge
pressures
FPSO Montara Venture during trials at Jurong shipyard
FPSO OSX-3 during conversion works at Jurong
shipyard
Mooring of FPSO P-63 at COSCO Shipyards
Papa Terra oil field
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2013 has been a remarkable year for the FPSO
society, marked with significant events.
However it has been an uneasy time for the oil
markets. The Offshore Industry is showing
growing anxiety of what lies ahead. If there is
a common feature that describes current
outlook globally, that is Uncertainty.
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We are confident that the report will provide
valuable information to you, either acting as
an offshore oil industry participant, or as an
investor and help you conclude in the most
significant question currently: Is there a
bubble in the offshore oil industry that is
about to break, or its performance is a
fundamental supply and demand quarrel?
Enjoy your study
Vasilis Moutoupas
Director or Platforma e-library
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Editor’s Note
Dear Reader
It is our honour to provide to you this year’s Annual Review for the FPSO
industry. Indeed 2013 was an interesting period with significant activity across
the Upstream chain from one hand and the first concerns, mainly expressed
in the personal level, of where does the industry go from here on the other.
Unless someone has special abilities it is extremely difficult to identify
accurately the turning point. Perhaps that sort of accuracy isn’t necessary for
a business as risky as the offshore oil. Exploring and producing hydrocarbons
from the depth of the sea is a demanding, uncertain and challenging task and,
in order to prevail, an individual must proceed gradually. In these uncertain
times Fundamentals become very important. As stated inside the report
balanced Planning and Adaptation become critical and the way provisions are
taken currently, to address future challenges, will define future developments.
I would like to reiterate at this point the last phrase of Section 1:
“A bubble cannot be identified till it blows off. It’s the story of the ant and the
cicada that teach us to prepare through good times to overcome the bad
ones.”
On behalf of the Platforma team I would like to thank you for your trust and
your support that encourages our efforts to provide a useful instrument to the
FPSO, and the offshore oil in general, industry. We will constantly try to
provide qualitative and reliable services and support industry participants, and
lately investors, in their decisions.
Moutoupas Vasilis
Platforma Project
Editor’s Note
Platforma evolved
The project was launched in 2012 aiming to become an open access online
encyclopedia for the FPSO Industry. Through this innovative e-library,
industry participants could acquire informative data for every aspect of the
FPSO as a vessel, or as a market, or investigate the processes involved in its
design, operation and decommission. The success was unexpected. The elibrary in these almost 2 years, received in total about 800.000 visitors and
had a daily visit rate of 150 individuals. This encouraged us to proceed to the
next level.
The Project evolved and will soon provide an Investors and an Academia
branch. Through the first development the potential investor could get helpful
information for the offshore oil industry, its members, recent developments
and financial data. The underlying reason is to provide an instrument that will
support the financial sector or individuals, considering acquiring stakes in the
industry, with a tool through which they can evaluate sector’s performance.
For this last reason The Platforma‘s “Offshore Oil Industry Investing Facility”
and Platforma’s “Offshore Oil Industry Index” are introduced. The Index is a
concept created to incorporate the whole Upstream chain under one scheme,
through which an updated outlook of the industry can be obtained. Companies
from seismic survey, to equipment and service providers, to vessel
contractors and so on are inserted and used to utilize a sole index.
Furthermore financial data in increased detail are provided for some key
FPSO operators.
The Academia branch will soon provide an online facility through which ecourses regarding the FPSO industry in general will be delivered by industry
experts. The concept specifies the provision of four quarter – long series of
lessons annually that will support course attendees to acquire an in depth
knowledge of the industry. Interested individuals or entities can address
Platforma about details of this branch. In any case further data for this
development can be retrieved through the e-library.
I hope that Platforma will become a point of reference in the FPSO and the
offshore oil industry in general and I wish that the services it provides would
be of great importance to industry participants. After all as we state in ours’ elibrary introduction page “we all live in the FPSO era”.
Available at:
www.theplatforma.org
Moutoupas Vasilis
Platforma Project

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