This month, E&P is featuring a number of developments in floating production. The need for greater capabilities has spurred the industry to develop an enormous number of new deepwater drilling and production systems.

Constriction in the floater market has opened the door to innovation. With few floating production systems available for hire, innovators are creating new types of systems that are capable of working at greater depths and in more harsh environments.

Some of the recent advances include systems that are considerably different from their predecessors. Dry tree semisubmersible designs are growing in number, and there are many more hybrid floating production system designs in the market today than ever before. Spar designs are moving out of the mainstream and are pushing into even greater depths, and there are two cylindrical FPSOs now in service.

Spending is high

Floating production systems have gone through significant changes over the past two decades as drilling and production have moved into deeper water. Today there are even more changes in the works. Analysis carried out by Infield Systems Ltd. indicates high spending levels will continue, which is an indicator that the trend toward innovation will continue as well.

According to Infield’s Floating Production Systems Market Update 2008/12, capital expenditure for the floating production market will exceed $34 billion over the next five years, an increase of 25% over the previous five-year period.

Infield classifies 2007, a year of very high spending in this segment of the industry, as “a year of consolidation.” During 2008, expenditures are expected to reach levels similar to the record levels seen in 2006. Looking to 2009, these analysts expect spending to exceed $6 billion.

Infield forecasts that year-on-year growth will be 4.3%, with the deepwater and ultra-deepwater sector commanding a significant percentage of this spend.

At the end of 2007 there were 264 operational floating production systems, of which 135 were brought online between 2003 and 2007. Over the next five years, the report says, there will be a further 175 units brought into operation, including speculative units that are currently in the yard but as yet are not contracted to a particular project.

The update points to Africa as the scene of the most activity both in terms of numbers of systems and quantity of expenditure as deepwater and, increasingly, shallowwater activities are expected to accelerate.

Future activity in Asia, the report says, will likely establish this region as the second largest in the floating production system (FPS) market segment.

“Activity in the FPS sector is one of the key indices of the health of the offshore industry, and as a result, increasing levels of investment and innovation indicate that the offshore industry will be able to extract resources from the most challenging regions,” the update says.

Infield expects that as the global fleet continues to grow, opportunities for consolidation and alternative strategies for ownership and development will present themselves.
There is also potential for further structural change in the floating production sector, the company says.

For more floating production data from Infield, go to http://www.Infieldlive.com.