Norway improving tax conditions for FPSO leasing

Buoyform, Fobox spearhead new FPSO concepts

Nick Terdre
Contributing Editor

• Aker Maritime's Buoyform concept is aimed at small fields. [23,672 bytes]
• The tentech FPSO design has been further developed to include a drilling capability. [53,878 bytes]
• Fred Olsen Production's Fobox is intended for ultra deepwater developments. [19,054 bytes]

The floating production market in Norway is expected to receive a boost before long with a change in the tax system that will bring fiscal neutrality for licensees between owning and leasing floating production systems.

Under the present rules, leasing is fiscally disadvantageous. Hence, the current generation of FPSOs and FPUs - Esso's Balder, Norsk Hydro's Njord, Troll B and C and Visund, Statoil's Norne and Åsgard units, and Saga's Varg FPSO - are all owned by the field licensees.

However, the out-going Labour government accepted the industry's case that such a situation deprived operators of a desirable degree of flexibility, and undertook to reform it. Even with the change of government following the recent national elections, it is expected that the necessary change to the fiscal rules will still be made.

This will bring Norway into line with countries such as the UK, where as a rule of thumb operators prefer to lease a unit that will work on a field for seven years or less. The change is likely to have a beneficial effect in Norway - opening up a new market in leased units for producing smaller fields.

European capability

Operators also are likely to give more serious consideration to having FPSO hulls built in Europe. This move follows reports of alleged defects in the Balder ship, which was built in Singapore for Smedvig. The unit is now undergoing remedial work at the UiE yard in Scotland.

At the same time, Norwegian contractors are moving towards having an in-house hull-building capability in Europe. Aker Maritime has recently acquired a controlling interest in Finnyards' Rauma facility, which includes a drydock in Finland, where it proposes to build FPSO and drillship hulls.

Kvaerner already owns Kvaerner Masa-Yards in Finland, where it is building the Jotun production ship for Esso Norge. Umoe, which has its own production ship design, is also understood to be seeking a European yard for hull construction.

In line with the industry trend, Norwegian contractors are offering a drilling capability in their FPSO concepts, to provide oil companies with an alternative to paying sky-high day-rates on the mobile drilling rig market. The result is a new acronym - the FPDSO, or floating production, drilling, storage and offloading vessel.

Meanwhile, the Smedvig/ Rasmussen production ship which was due to be delivered from the Mitsui yard in Japan in November, now appears as if it will be converted into a deepwater drillship. Smedvig has a letter of intent from Unocal for a five-year drilling contract in the Gulf of Mexico.

Small fields buoy

Maritime Tentech, part of the Aker Maritime group, has launched the Tentech Buoyform concept as a solution for small fields. The Buoyform is an FPDSO platform (D for drilling) drawing on the Big Buoy concept originally developed by Maritime Trosvik in the 1970s, and the spar design as delivered by Aker Maritime to deep-water developments in the Gulf of Mexico.

Although the Aker Maritime group is a successful supplier of production ships, it acknowledges that the relative expense of such items as the turret and swivel make it difficult for such a concept to achieve acceptable small-field economics. This is a view shared by Statoil, which has participated in the Buoyform development and is currently evaluating it for two specific North Sea applications.

The Buoyform is a conical buoy-shaped platform with a hull that is wider at the bottom than the top. The neck of the hull, the part in the water-plane area, is vertical. The hull does not weathervane, but is held in place by a conventional mooring spread, according to Knut Midtsian, senior engineer in floating production at Maritime Tentech. The spread mooring eliminates the need for a turret system.

The design is intended to have very limited motions - less than either a production ship or a semisubmersible platform. At the bottom of the hull is a bilge keel (horizontal fins) which act to dampen the vertical motions. In September, model tests were due to be performed at the Marintek facility in Trondheim to confirm the motion analysis.

The hull and deck structure are made of steel, partly high-tensile steel to reduce weight. Simple shipbuilding construction techniques are required for the hull, giving the platform an overall detailed design and construction period of an estimated 23 months, which compares well with the 30-36 months typically required for an FPSO tanker or semisubmersible.

Two options have been developed for storage and water ballast - segregated tanks and combined tanks. In the latter case, the outer dimensions and the hull steel weight can be substantially reduced. Ballast water is used to keep constant draft.

The deck is octagonal and supports a conventional process system. Production is through subsea wells connected to the topside by flexible risers. Oil export is by direct transfer through one of two offloading points located diametrically opposite each other at the side of the deck, Midtsian says.

Drilling facilities can be incorporated. Alternatively, the Buoyform could be outfitted purely for drilling duties.

Meanwhile, Maritime Tentech has further developed the Tentech vessel design, the basis for its successful FPSO concept, to incorporate drilling facilities. This equipment - the company recommends the use of sister company Maritime Hydraulics' RamRig concept - would be installed on or over the turret. Again, this work has attracted the interest of Statoil, for which Maritime Tentech has performed an in-depth study.

To save project time, a newbuild FPDSO equipped initially only with drilling facilities could be deployed to drill the development wells while the production equipment was being built, Midtsian says.

The Tentech hull also is appropriate for use as a drillship. The drilling rig is located near midships giving very good motion characteristics, and its greater deckload capacity would suit it for deepwater drilling. Instead of a turret mooring system, the vessel could keep station by means of dynamic positioning.

Fred Olsen restructures

The Fred Olsen offshore companies - Dolphin Drilling in Aberdeen, Dolphin in Stavanger, Fred Olsen Production, and Harland & Wolff - have recently been restructured into Fred Olsen Energy to provide integrated solutions in such areas as floating production.

The lead role in production leasing falls to Fred Olsen Production (FOP), which is able to call on the services of the other companies - Dolphin Drilling and Dolphin for drilling, and Harland & Wolff for vessel engineering and construction - as required. FOP's own capability is in the provision, through sale or lease, and operation of floating systems for production, storage and export. The group also part-owns the US reservoir management company Callan Petroleum, giving it the capability to assess and manage reservoir risk.

One of the group's strongest references is the Schiehallion FPSO which Belfast-based Harland & Wolff is building for BP. This is a large vessel, with 150,000 b/d oil production capacity and 900,000 bbl storage, which will be installed next year in the inhospitable waters of the Atlantic Frontier.

At the other end of the scale, FOP recently won a contract to provide a leased production ship for Ranger's Kiame field in Angola. At 8 million bbl, Kiame thus becomes one of the smallest fields to be developed by a stand-alone floater, and FOP, whose four-year contract is worth some $50 million, can claim to provide economic solutions for small field development. As Petter Hoie, project controller for FOP, puts it, "we will look at any field, of any size, anywhere."

The amenable climate off Angola helps to reduce costs. There is no need for a turret, swivel, or turret deck house. The Kiame FPSO will be conventionally moored, Hoie says.

The unit will be converted from Knock Buie, a Suezmax tanker acquired from First Olsen Tankers, probably at a Far East or Middle East yard. Engineering for this will be provided by FOP's partner in the project, Nortrans Engineering. The vessel will be installed in 142 meters water depth, with first oil expected in the Spring of 1998 and peak production from two wells at a modest 7,000-9,000 b/d.

FOP also has the Knock Taggart tanker working as a storage and offloading unit for Abacan in Nigeria, while Knock Dee started work as a storage and shuttle tanker on Soekor's Oribi field off South Africa last May.

The company is also keen to make its debut in the deepwater arena, and has bid to Petrobras for the provision of a leased FPSO for use in 900 meters water depth on the Espadarte Field in the Campos Basin. In this case, although the climate is benign, the vessel will require an internal turret due to the water depth.

FOP has also developed a new concept for ultra deepwater developments. This is the Fobox, a box-like structure with drilling and production capability. The base case design has an operating draft of 31.5 meters and a deck 82.8 meters square, with up to 2,500 sq meters available for process equipment. Storage for 600,000 bbl is provided inside the large hull form.

The Fobox is quick and easy to build as it has few curved surfaces, according to Hoie. It incorporates a unique skirt design to reduce heave. The design has successfully passed model tests at the Marintek facilities in Trondheim.

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