Two FPSOs still on track for first oil by year-end

Dutch FPSO operator SBM Offshore has put its back into several floating, production, storage and offloading (FPSO) projects, and two of these remain on schedule to achieve the first oil by the end of 2023. One of these vessels is destined to work in Guyana and the other one in Brazil.

Within its results for 1H 2023, SBM Offshore reported a directional revenue of $1.49 billion, a 15 per cent decrease compared to $1.76 billion in 1H 2022, driven by directional turnkey revenue which decreased to $558 million compared with $909 million in the year-ago period, mainly resulting from the comparative effect of the partial divestment of the FPSOs Almirante Tamandaré and Alexandre de Gusmão at the beginning of 2022.

In addition, the decrease stems from the completion of the FPSO Liza Unity project in the first half of 2022 and a reduced level of progress during the first half of 2023 compared with the same period in 2022 on the FPSO Almirante Tamandaré consistent with the commencement of topsides’ integration, partly offset by additional variation orders and increased level of activity on FPSOs Prosperity and One Guyana.

The company’s directional EBITDA for 1H 2023 came in at $457 million compared with $500 million in the year-ago period while its directional net profit stood at $36 million in 1H 2023, down from $103 million in 1H 2022. The firm’s net debt increased from $6.1 billion to $7.2 billion as of 30 June 2023, reflecting the continued investment in growth.

SBM Offshore’s pro-forma directional backlog increased by $1.7 billion compared with the position on 31 December 2022 to a total of $32.2 billion, mainly due to the signed ten-year operations and maintenance enabling agreement for the Guyana FPSO fleet, partially offset by turnover for the period which consumed approximately $1.5 billion of backlog.

Bruno Chabas, CEO of SBM Offshore, commented: “The increase in our order book to a new record level and reiteration of the 2023 guidance underline the fact that our strategy as an energy transition company is delivering results. We are on track to achieve first oil as planned this year on two major FPSO projects. 

“FPSO Prosperity is already in Guyanese waters and FPSO Sepetiba has started her journey to Brazil from China. While we continue to live with the after-effects of the pandemic plus supply chain and inflationary constraints, we are progressing the remaining projects under construction and the overall margin remains robust at portfolio level.”

Following the completion of integration and onshore commissioning activities, the FPSO Prosperity departed from Singapore. Currently, project teams are completing offshore commissioning activities while the hook-up and installation campaign is progressing. The first oil is anticipated in 2023 and the FPSO will be chartered to a consortium consisting of ExxonMobil, CNOOC, and Hess for operations offshore Guyana.

This vessel will work on ExxonMobil’s Payara development project, located approximately 200 kilometres off Guyana, targeting an estimated resource base of about 600 million oil-equivalent barrels. The Payara project is on track to come online by the end of 2023.

The FPSO Prosperity is designed to produce 220,000 barrels of oil per day, with an associated gas treatment capacity of 400 million cubic feet per day and a water injection capacity of 250,000 barrels per day. It will be able to store approximately 2 million barrels of crude oil.

In February 2023, the topsides integration and onshore commissioning activities for the FPSO Sepetiba, which is destined for Petrobras’ Mero field in the Santos Basin offshore Brazil, were ongoing. Come June 2023, the work was wrapped up, thus, the FPSO, which is SBM Offshore’s third Fast4Ward one, sailed away on 16 June from the BOMESC shipyard in China.

Therefore, the FPSO started its transit to the Mero field in the Santos Basin offshore Brazil, located 180 kilometres off Rio de Janeiro. SBM Offshore has a contract with Petrobras for the 22.5 years lease and operation of the FPSO Sepetiba and the first oil is expected in the second half of 2023.

This FPSO is capable of producing up to 180,000 bpd and Petrobras intends to put another two units into operation on the field by 2025, bringing the total number of units at the Mero field to five and corresponding to 770,000 bpd of the installed capacity in the country.  

According to SBM Offshore, the environment remains challenging with continued inflationary pressures and supply chain constraints. However, its fleet’s uptime was 99.5 per cent in the first half of 2023 and the total number of MPF hulls ordered to date under the company’s Fast4Ward programme, stands at eight with six delivered to projects and exclusivity for the seventh granted to ExxonMobil Guyana.

The company explains that the FPSO Almirante Tamandaré’s topsides modules lifting campaign is progressing along with their integration. The FPSO delivery continues to be on track for 2024 and the first oil is anticipated in early 2025.

The FPSO will be the sixth unit of the definitive system to be installed at Petrobras’ Búzios field in the Santos Basin, approximately 180 kilometres off Rio de Janeiro in Brazil. It will be capable of processing 225 thousand barrels of oil and 12 million cubic meters of gas per day.

Moreover, the FPSO Alexandre de Gusmão, which is expected to work for Petrobras on the Mero field in the Santos Basin offshore Brazil, will be the fourth definitive system to be installed in the Mero field. Based on the firm’s statement, the modules fabricated in Brazil are being progressively delivered at the yard in China while the topsides fabrication continues to progress. The first oil is expected in 2025.

In addition, the FPSO One Guyana’s topsides fabrication is progressing in line with the plan and the first oil is scheduled for 2025. The construction of topside modules for the FPSO started in September 2022 and two steel strike ceremonies were held in both Keppel FELS and Dyna-Mac yards to mark the occasion. 

This FPSO will be used for the fourth development within the Stabroek block, called the Yellowtail development project, which comprises six drill centres and up to 26 production and 25 injection wells. ExxonMobil sanctioned the project in April 2022 and followed it up with a contract confirmation with SBM for the supply of the FPSO for the project.

The FPSO One Guyana will have an optimum production capacity of 250,000 barrels per day (bpd) of oil, a storage capacity of two million barrels of crude oil, a gas treatment capacity of 450 million ft³ a day, and a water injection capacity of 300,000 bpd.

Chabas pointed out: “The economics and low emission qualities of deepwater resources mean that they will play a leading role in fulfilling future demand through the energy transition, where the FPSO is the solution of choice. Given the evolution of the financing market, new models and sources of finance will need to mature and evolve.

“We are well placed to capitalise on this new dynamic given our ability to structure new models as in Guyana and the depth and breadth of our experience and relationships with financial institutions. The two un-allocated Multi-Purpose Floater (MPF) hulls under construction further strengthen our ability to secure new opportunities in a market with strong fundamentals.”

The Dutch FPSO operator claims to be on track to meet the target set on gas flared with a maximum average fleet target of 1.48 mmscf/d. Furthermore, SBM Offshore has secured a contract extension related to the lease and operations of the FPSO Mondo to December 2024. This FPSO is currently located on the Mondo field offshore Angola. The vessel started its original 15-year lease with ExxonMobil in January 2008.

Meanwhile, the company further underlines that all three floaters it constructed for the Provence Grand Large pilot project have been loaded out from the yard at Fos-sur-mer and launched in the water. The integration of the three turbines with a capacity of 8.4 MW each by Siemens-Gamesa is progressing and will be followed by the offshore installation campaign of the floaters by SBM Offshore. 

Once commissioned, the pilot farm will produce the equivalent of the electricity consumption of 45,000 people and will account for approximately 10 per cent of the total installed floating wind electricity capacity in the world.

“In new energies, we completed the successful load out of the floating foundations for our first floating offshore wind farm and integration of the turbines has commenced. This brings us one step closer to delivering the first iteration of our latest floating energy solution, demonstrating our ability to continue to innovate and to stay relevant through the energy transition and beyond,” concluded Chabas.