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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (27531)	11/29/2003 11:17:31 PM
From: Tomas	Read Replies (1) \| Respond to of 206181

Numbers of floating production units set to grow in years to come - Bright days on horizon Upstream, November 28 By Erik Means Global oil output has become increasingly dependent on the steadily growing fleet of floating production units over the past decade, and this trend is set to continue in dramatic fashion in the next few years. According to data provided by International Maritime Associates, a consultancy based in Washington DC, the combined processing capacity of the world's existing fleet of installed floaters now stands at 10.8 million barrels per day. The corresponding figure at the end of 1992 was a mere 1.3 million bpd. IMA president James McCaul says this figure will make another remarkable jump over the next two years, with floater capacity set to climb another 32% to hit at least 14.5 million bpd of processing capacity by the end of 2005. This increase is based solely on the combined output potential of floaters presently on order by oil companies and contractors around the world. IMA figures put the overall floater fleet at 154 installed units -- including 92 floating production, storage and offloading vessels, 38 semi-submersibles, 15 tension-leg platforms and nine spars -- up from only 42 units a decade ago. The increase in capacity will come from the 37 production units presently on order, dominated by 25 FPSOs, 12 of which are newbuilds, with 11 conversions and two upgrades. Orders for semisubs, TLPs and spars stand at four apiece, IMA reveals. Design houses, fabricators and vendors will also be pleased to see McCaul's forecast for new business, beyond the orders already placed. Fresh figures from IMA suggest that a total of 87 floaters are planned or under study at present, and McCaul projects that between 62 and 89 new floater orders will be placed by the end of 2008. These contracts are likely to represent between $22 billion and $31 billion in capital expenditure, he says. "There are lots of orders in the pipeline," McCaul says. He admits that new orders during the course of 2003 have been at a somewhat lower level than he had anticipated early in the year. Nevertheless, that has not led him to reduce his projections for the period through 2008. "We haven't seen any reason to change our estimates at this point," McCaul says, explaining that the lower number of new orders so far in 2003 is the result of slight delays on projects in West Africa and the US Gulf. He is entirely confident that those projects will materialise soon. Some 60% of new orders are expected to comprise FPSOs, while 30% will be spars or TLPs, and 10% are likely to be semisubs. Other experienced floater analysts concur with McCaul's numbers. "I think that's entirely reasonable," one Oslo-based analyst says of IMA's prediction of between 62 and 89 new floaters. He reasons that the numbers equate to seven or eight new FPSOs per year on average, which is about on par with recent years. Geographically, the so-called Golden Triangle -- West Africa, Brazil and the US Gulf -- is moving into a position of complete dominance of the floater market. The West Africa region presently has 20 floaters in operation plus another 12 under construction. Furthermore, McCaul says an additional 22 floaters are now being planned or under study for the region. Brazil, meanwhile, is presently home to 29 floaters, with another six FPSOs presently on order. IMA claims some 16 floaters are at the planning stage in Brazil. In the Gulf of Mexico, the addition of eight units now on order will bring the total tally to 30, with another 16 units -- 10 of which are thought to be for water depths beyond 5000 feet -- under study. The UK and Norway -- for so many years at the forefront of the floater business -- are likely to be playing second fiddle in the near future. There are now 33 floaters on station in north-west Europe, plus one on order, with an additional six reported by IMA to be on the drawing board. There are a total of 37 floaters in the oceans of Asia and Oceania, with another eight on order and some 22 under study. This high level of activity has led to some concern about capacity problems and potential bottlenecks at various stages, but experts claim the industry should be able to take the strain of about 12 to 16 new floater orders per year over the next five years. "I don't think there's any shortage of capacity to build floaters," McCaul says, pointing to an anticipated rise of the Chinese yard industry as being one factor. Another expert chips in that the Chinese yards will initially make their impact in their domestic market, while the South Korean yards should continue to dominate international orders for newbuildings and Singapore yards will remain strong on tanker conversion work. Looking back 10 years, the primary challenge facing the floater market was convincing major operators that floating production technology could be trusted. That is no longer an issue. Today, the primary challenge relates to project management -- running a tight ship and keeping costs and schedules under proper control -- particularly on the mega-floaters. "The floater market is quite good," McCaul says. "There was probably slight apprehension about the slowdown in new orders this past year, but the fundamentals are still there and there's a lot of room to grow."