North-East yards target FPSOs overseas as UK sector slumps

UK tax regime, low oil prices, weak demand

Aker McNulty currently is the UK's most successful FPSO topsides conversion specialist.
Weak oil prices and an uncertain UK oil tax regime have combined with a downturn in FPSO conversion projects in the North Sea, encouraging some yards in the North East of England to look further afield for new work.

Aker McNulty in South Shields, for example, is pursuing opportunities in Brazil in conjunction with its US sister company Aker Maritime. In particular, the two companies have tendered for the Petrobras Jequitiba vessel conversion due to operate on the Bijupira and Salema Fields.

Meanwhile Aker McNulty currently is in the process of completing three major topsides conversions - for the Janice, Banff, and Pierce fields. Business development manager Doug Cambers, says that this is the first time three major projects of this kind have been carried out simultaneously by the same yard. "We have managed the impossible" says Cambers, "and at peak have been employing a workforce of around 4,000 people, which we believe is a record for the region."

According to Aker McNulty, all three projects have been challenging in different ways. The Banff Ramform fitout is a total EPIC contract for Aker Maritime UK - the first time that Aker McNulty and Aker Oil & Gas Technology have worked together on an FPSO project. The company has had to absorb an increased workscope during the conversion to accommodate the Enterprise-owned Kyle Field which is due to come onstream at the same time as Banff, bringing the production rate up to 95,000 b/d, from the originally planned 60-65 b/d.

"This has meant that we have had to increase the size of the topsides incorporating bigger vessels and extra modules," says Cambers. "The conversion was already well advanced when the workscope was changed, which meant that the project was delayed in some areas and then had to accelerate to get back on schedule."

For the Pierce project, the original intention was for the process modules to be delivered complete. This did not happen, so Aker McNulty had to complete, or in some cases build, the modules themselves, which added around 30% more work to be accommodated into the schedule. Janice has also experienced a general increase in the workscope.

On the North Sea front, Aker McNulty currently is pursuing a number of FPSO opportunities including the Premier Chestnut fast-track project and the Fina Otter project. The company is particularly hopeful of getting the Chestnut conversion, as it is being bid by both Bluewater and the Statoil-owned company, Navion, both of which Aker McNulty has worked with in the past.

Aker McNulty is also in discussions with Harland & Wolff in Belfast with a view to making joint approaches to future projects and to bolster the H&W organization with expertise provided by Aker McNulty. "We are also looking at cooperating with local companies in areas further afield, such as the Middle East and Australia," says Cambers.

On the topic of collaboration, Cambers points out that being part of Aker Maritime has fostered an air of cooperation within the group. It currently is fabricating a small module for its Norwegian sister company, Aker Stord, for the Eldfisk Field.

A&P Tyne

On the other side of the river Tyne, A&P Tyne's last FPSO conversions - the North Sea Producer and Maersk Curlew - were both completed in 1996. With no firm FPSO contracts currently on its books, the company has joined forces with MacGregor Energy Services in order to penetrate the drillship market.

According to sales director, Alastair Brown, the new venture will be advantageous to both companies and will offer a comprehensive engineering service to what they believe is one of the fastest growing sectors in the offshore industry. "While our expertise is in vessel upgrades and refurbishment, MacGregor has considerable experience in topsides drilling equipment," says Brown. "In addition, the collaboration offers us increased wet dock facilities at MacGregor's Invergordon site which means we could look at larger conversion projects such as semisubmersibles."

Brown also points out that with no cheap hulls readily available on the market, lash vessels provide an increasingly interesting option for conversion work. A&P is currently bidding two conversion projects - a pipelaying vessel and a multi-purpose installation, maintenance, and repair vessel.

Like Aker McNulty, A&P is also looking further afield for FPSO conversion work and has also submitted a bid for the Petrobras Jequitiba conversion. " The project involves converting a 25-year-old 118,000 dwt tanker," says Brown. A massive strip-out will be needed, and the tanker will be required to last a further 15 years.

A&P also believes that West Africa offers good prospects. For its home market, A&P has tendered for the Fina Otter Field conversion which is currently awaiting partner decision and is in the processing of preparing a bid for the Premier Chestnut Field. "The general feeling is that there is a limited future for FPSOs," continues Brown. "We understand that Kv?rner is looking into the concept of combining drilling with floating production units and that the future lies in FDPSOs, but there is a lot of work to be done to get the technology right before this market opens up."

Odebrecht Oil & Gas

In Teesside, Odebrecht Oil & Gas (formerly Odebrecht-SLP) has also carried out a recent acquisition to strengthen its overall capabilities. Odebrecht has acquired the UK business interests of ABB Lummus Global, which has extensive engineering, procurement, and construction supervision capabilities, to complement its own engineering and procurement business.

According to Odebrecht this enhancement, coupled with its fabrication facility in Teesside, will enhance its ability to provide solution-driven approaches to total life of field projects in the FPSO and minimal facility platform markets. With its head office now based in Surrey, the intention is to bid globally for work to fill its yards.

Meanwhile, recent work at the Teesside yard has included fabrication of a jacket and piles for the Shell Ketch Field and three of its minimal facility jacket concepts - for Arco's Waveney and Thames Fields and Mobil's Malory Field - each weighing in the region of 400 tons.

Topsides for all the four jacket projects have been built at Odebrecht's Lowestoft yard.

The company is also undertaking a EPC contract for a combined 78-cabin and helideck module for the Shell Shearwater development. With engineering work currently underway, fabrication is due to commence in April next year. On completion - due in the first quarter of 2000 - the module will be installed offshore onto the main deck of the Shearwater C platform, which is being fabricated at AMEC Process & Energy in Tyneside.

The EPC contract - valued at around £7.5 million - represents the first standard contract exercised by Shell Expro and its contractors in accordance with the new CRINE guidelines which reduces the necessity to negotiate individual contract terms. AMEC Process & Energy is the appointed project manager of the contract on behalf of the Shearwater Development Alliance consisting of Shell UK, Heerema Hartlepool and Amec.

Heerema

The Shearwater project is also providing work for Heerema in Hartlepool where it is fabricating a small, 2,000-ton wellhead deck. The company is also fabricating a 12,000-ton topsides module for Shell's Corvette gas platform with management being provided from its Lowestoft base.

Jackets for both the Shearwater wellhead deck and the Corvette platform are being constructed by Heerema's sister company, HHB in Vlissingen, The Netherlands, with towing and installation services carried out by HMC. At its Victoria Dock base, Heerema is fabricating a 500-ton enhancement compression module for the Conoco Viking Field, which is due for completion in mid-September.

According to Heerema business development manager Peter Self, the company is currently tendering for the British Gas Easington Catchment Area project and for Texaco's Captain Phase 2 development. Heerema has entered into a joint venture with ABB Leiden in order to submit an EPC bid for the Texaco contract. If successful, Heerema would fabricate the topsides and jacket with ABB providing engineering and some of the procurement functions.

Kværner Oil & Gas

Also on Teesside, Kv?rner Oil & Gas is busy carrying out a variety of topsides projects at its Port Clarence yard in Middlesbrough. Work is nearing completion on a contract to fabricate drilling facilities for the Esso Jotun platform. The scope, which includes engineering, procurement, and construction, is for a 1,500-ton drilling support module and 1,300-ton derrick equipment set.

Meanwhile, work continues on two 2,000-ton decks for Elf's Elg in A and Franklin wellhead platforms - due for delivery in the second quarter of 1999 - and on decks and flarebooms for the Thebaud and Venture developments for Sable Offshore.

Kvaerner's Teesside facility has also been awarded a £200 million contract to complete the topsides on a new-build FPSO for the Amerada Hess Triton project. While the hull of the FPSO is being constructed in Korea, Kv?rner will commence work on the remaining fabrication and process work when the vessel arrives at the site around the beginning of November this year. Overall completion also due in the second quarter of 1999.