The Floating Production, Storage and Offloading (FPSO) units are a growing trend in upstream, and they suppose a major technological leap for deep-water production. As they have several advantages over typical drilling assets or platforms, these units are challenging the pandemic and they are on their way to dominate South America’s market.
Three of the main advantages of FPSO’s are the reduced investment they represent in front of oil rigs; faster rollout periods, and thus, quicker return of the investment. An FPSO can be rolled out in about 10 months or a year, while a typical oil rig needs 2 or three years to be rolled out.
They are also cheaper than other infrastructure, as they are mainly designed for deep-water extraction. In comparison, the infamous Deepwater Horizon platform costed around $560 million in 2001, while the largest FPSO in operation today, Exxon’s Kizomba A, costed around $800 million.
Nevertheless, as they are designed to operate in harsh environments, and in several platforms, through connection and disconnection, they outlast their platform counterparts by far. They are also safer in the sense that they can move away or be towed away from the production site, in case of an extreme weather event, and then, once it passes, to be reconnected and back to normal production.
In this regard, Floating production units make feasible production in harsh wells or small fields; as they can operate in varying waters, from shallow ones, to deep water sites, or sites that, by their location don’t justify the construction of a complete oilfield platform.
Recommended for you: Brazos Midstream to upgrade two cryogenic processing plants with Honeywell UOP
FPSO big in Brazil
Because of all these advantages, FPSO’s are on their way to dominate South America’s market, especially Brazil, as the country has identified several reserves in ultra-deep offshore areas. Petrobras, in this regard, has the most aggressive development plans for this technology.
ExxonMobil is one the companies better positioned to capitalize this market opportunity. In early December, the company announced it expected to have around 10 floating units at the Stabroek block; off the coasts of the Guyana, in Brazil.
“We expect to have five FPSOs in operation in Guyana by 2026; and see the potential for a total of seven to 10 FPSOs,” said Jayme Meier, Exxon’s spokesperson in the Rio Oil& Gas 2020 digital conference.
The Stabroek field is one of Latin America’s biggest offshore projects. It has an estimated reserve of more than 8 billion barrels of oil, and it’s one of the largest offshore finds in Brazil. Works there have endured the hit of the pandemic, as Exxon has maintained drilling activity and production without a single case of the virus.
In Brazil, Exxon has a portfolio of 28 blocks in several basins; the company operates 17 of the total blocks, many of which are operated through the floating units technology. According to S&P, two more wells are expected to be drilled in 2021 in the Campos Basin.
