OFFSHORE UPDATEFloating ProductionThe number of ß oating production units grew 5% in 2013. Here we examine the global market and future opportunities.BY JIM MCCAUL, IMACurrently, there are 319 oil/gas ? oat- ? oaters and no LNG processing units tained for use on another ? eld con- able amount under current market con-ing production units are now in service, were in service or on order. Five years trolled by the current owner. All require ditions is considerably lower than the on order or available for reuse on anoth- ago there were 269 oil/gas units and 6 modi? cation and upgrade to be reused. carrying value.”er ? eld. FPSOs account for 65% of the LNG processing units. By the begin- Depending on the new ? eld, the cost to To place the issue in perspective, 24 existing systems, 75% of systems on or- ning of 2013 there were 306 oil/gas pro- modify the processing plant, mooring FPSOs have been redeployed over the der. Another 24 ? oating LNG process- duction ? oaters and 20 LNG processing system and refurbish the unit can easily past ten years – accounting for ~20% ing systems are in service or on order. ? oaters. Now there are 319 and 24 exceed $100 million. of the FPSO contracts during this time Liquefaction ? oaters account for 13%, units respectively. Ten of the available units are single period. Assuming this redeployment regasi? cation ? oaters 87%. No lique- Overall, the number of units grew 5% hull, ? ve are double hull and three have pace continues, more than 7 years will faction ? oaters are yet in service – all 3 during the past year, 69% over the past double sides or double bottom. Single be needed to clear the inventory of FP-are on order. decade. (See Figure 2) hull unit are less marketable than dou- SOs now looking for a ? eld contract. In addition, 100 ? oating storage units ble hull units. And this assumes a project match can are in service, on order or available. Details for available FPSOs can be be found for all units (which will not (See Figure 1) Redeployment Prospects found at www.imastudies.com. happen) and no further units come off for Available FPSOs Many of these available FPSOs (par- ? eld over the next several years (which Growing Number of Eighteen FPSOs have stopped produc- ticularly single hull units) will not ? nd will happen). Floating Production Units ing and are available for redeployment. another ? eld. This is behind the de- Bottom line is there are far too many The number of ? oating production The latest to join the inventory of idle cision of SBM in December to write available FPSOs for the market to ab-systems has grown at a strong pace over FPSOs are Kuito and BrasiI, VLCC- down the book value of the FPSO Fal- sorb. This situation should cause lend-the past decade. Aside from a tapering size units owned by SBM. The lease on con. Explaining its decision to take a ers to look very carefully at residual off in 2009/10, year to year growth has each concluded at end 2013. They are special charge of $55 million on Fal- values in FPSO ? nancings. Anything been in the range of 5 to 12% during to be decommissioned. con (marketed since 2009) and Alba (a more than scrap value may be opti-this period. Some of the 18 available FPSOs are tanker acquired in 2009 as a conversion mistic, even for FPSOs built on new or Ten years ago 203 oil/gas production actively for sale. Some are being re- hull), SBM said the “estimated recover- young hulls. Figure 1 Figure 212 Maritime Reporter & Engineering News • JANUARY 2014MR #1 (10-17).indd 12 1/7/2014 12:22:04 PM