Mobile Offshore Production Systems for Offshore Oil and Gas Fields Presented by: Bruce Crager Rice Annual Forum XIII September 14, 2010 Houston, TX 1

1. Deepwater drilling began long before we had production capability

2. Time and depth gap between drilling and production is closing 3. 10,000’ has been the water depth threshold for almost 10 years 2

Issues Driving Use of Mobile Offshore Production Systems (MOPS): 

Water Depth



Gas or Oil Production (Primary Function)



Geographical Location



Oil Export Options



Gas Usage / Export Options



Fabrication



Wellhead Location (Surface, Subsea or both) 3

Mobile Offshore Production Systems: Principal Types

SUBSEA WELLHEADS

SEMISUBMERSIBLE FPS

MONOHULL FPSO

SURFACE WELLHEADS

JACKUP JPU

TLP

SPAR

4

Wellhead / Tree Location: Surface vs. Subsea Advantages Subsea Completions

Surface Completion

Disadvantages

Lesser or no need for on-site surface support

Complex / costly to access for intervention

Enables wide areal distribution of wells

Requires remote control system

Can reduce project capex

May increase opex

Simpler / cheaper to access for intervention

Requires supporting platform

May reduce drilling cost Lower opex

Restricted areal coverage, directional wells Requires heave compensation on floater

5

PRODUCTION SYSTEM TYPES Solutions for Recovery of Offshore Oil & Gas

COURTESY OF: MUSTANG ENGINEERING

Three System Groups: 1.

Dry Tree Systems – Fixed Platform, Production Jackup, Compliant Tower, TLP, Spar

2.

Wet Tree Systems – New Gen. TLPs, Conventional TLPs, FPSOs, Cell Spar, Control Buoy, SS Tiebacks, Semi-FPS

3.

Mixed Dry / Wet Tree Systems – Fixed Platforms, New Gen. TLP, Conventional TLP, Spar

6

Jackup Production Unit (JPU)

Operating:

40

First:

1971, Gulftide, Ekofisk

Deepest:

Harding, UK, 400 ft

Depth Range:

43 ft – 400 ft

Construction:

2

Locations:

Worldwide

7

FPS - Semi Submersible

Operating :

39

Stacked:

4

First:

1975, Argyll, Hamilton

Deepest:

7,920 ft, MC920 Independence Hub

Construction:

6

Locations:

Worldwide

8

FPSO

Operating :

182

Stacked:

13

First:

1977, Castellon, Shell

Deepest:

8,300 ft, Cascade Chinook

Construction:

29

Locations:

Worldwide

9

TLP Operating :

24

First:

1984, Hutton, Conoco

Deepest:

4,674 ft, Magnolia GB783/84

Construction:

1

Locations:

North Sea, Angola, Gulf of Mexico, Indonesia and Equatorial Guinea

10

SPAR

Operating :

18

First:

1996, Neptune, VK 826

Deepest:

Perdido 8,008 ft Alaminos Canyon 857

Construction:

0

Locations:

Gulf of Mexico, Malaysia

11

Optimum Application Ranges 50,000

Spar

Facility Payload (st)

Spars Semis

40,000

TLP

Semi

30,000

TLP 20,000

10,000

0 0

2,000

4,000

6,000

8,000

10,000

Water Depth (ft)

Source: FloaTEC 12

Worldwide Forecast Floating Activity by Year 2010-2014e Units to Award 2010-2014: 129

Units to Start-up 2010-2014: 85

40

Number of Units

35 30 25 20 15 10 5 0

0e 1 20

1e 1 20

2e 1 20

3e 1 20

4e 1 20

Year Aw ard

Startup

Source: Quest Offshore Resources, Inc.

13

Worldwide Forecast Floating Activity by Year 2010-2014e Base Mean and High Case Units to Award 2010-2014: 129

Units to Start-up 2010-2014: 85

40 35

Number of Units

30 25 20 15 10 5 0 2010

2011

2012

2013

2014

Startup Year Base

M ean

High

Source: Quest Offshore Resources, Inc.

14

Top Operator Analysis

15

Worldwide FPSO Top Operators Flowing and Under Construction Top 11 Operators (87 of 211 Units) 35 30

20 15 10 5

on oc oP hi lli Pe ps tr on as C ar ig al i

C

Pe tr ol eu m

he ll

ds id e

W oo

R

oy al D

ut ch /S

he vr on C

bp

En i

ta l To

C Ex xo nM ob il

C

N

O O

ra s

0

Pe tr ob

Number of Units

25

Operator Source: Quest Offshore Resources, Inc.

16

Worldwide FPS-Semi Top Operators Flowing and Under Construction Top 4 Operators (37 of 49 Units) 25

Numberof Units

20

15

10

5

0 Petrobras

Statoil

bp

ATP

Operator Source: Quest Offshore Resources, Inc.

17

Worldwide TLP Top Operators Flowing and Under Construction Top 7 Operators (17 of 24 Units) 6

5

Number of Units

4

3

2

1

il St at o

es s H

il Ex xo nM ob

En i

on oc oP hi lli ps C

ill ito B P H B

R

oy al D

ut ch /S

he ll

n

0

Operator Source: Quest Offshore Resources, Inc.

18

Worldwide Spar Top Operators Flowing and Under Construction Top 4 Operators (13 of 18 Units) 6

5

Number of Units

4

3

2

1

0 Anadarko Petroleum

bp

Murphy Oil

Chevron

Operator Source: Quest Offshore Resources, Inc.

19

Normalized Forecast

20

Worldwide Forecast Floating Activity by Year 2010-2014e Normalized Case - 85 Unit Startups Forecast Demand Drivers: Deepwater exploration, marginal field exploitation, and early production / phased developments

90

Number of Units

80 70 60 50 40 30

14 Units forecast to startup in 2010

20 10 0 2010e

2011e

2012e

2013e

2014e

2005-2009

2010-2014

Startup Year Source: Quest Offshore Resources, Inc.

Units Under Construction

Forecast Dem and

FPS Units Flow ing

21

Activity Share by FPS Type 2010-2014e Startup Year Normalized Case - 85 Units 30 Number of FPS Units

25 20 15 10 5 0

2010

2011

2012

2013

2014

FPSO

10

12

6

13

25

FPS-Semi

2

0

2

2

4

Spar

2

0

0

0

1

FLNG

0

0

1

0

1

TLP

0

0

0

3

1

Startup Year

Source: Quest Offshore Resources, Inc.

22

Global Award Analysis

23

Number of FPS Units

Worldwide FPS Awards 2002 (A) – 2014 (e) (Mean Case)

50 40 30 20 10 0 2002 2003

2004

2005 2006

2007

2008 2009

2010 2011

2012

2013 2014

Hull Award Year

Aw arded

Unaw arded

High Case

Base Case

Source: Quest Offshore Resources, Inc.

24

Worldwide FPS Forecast Awards 2010 (e) – 2014 (e) Area Activity Share By Region (129 Units Mean Case)

14

Number of FPS Units

12 10 8 6 4 2 0

2010

2011

2012

2013

2014

Africa/Medit.

2

4

4

8

8

Asia Pacific/Middle East

3

8

5

10

11

North America

3

1

1

4

2

North Sea/Arctic

1

4

2

3

3

South America

12

3

11

5

11

Hull Award Year

Source: Quest Offshore Resources, Inc.

25

Worldwide FPS Awards 2010 (A) – 2014 (e) Mean Case By FPS Type (129 Units)

30 Number of FPS Units

25 20 15 10 5 0

2010

2011

2012

2013

2014

FPSO

17

13

20

24

26

FPS-Semi

1

3

1

2

5

Spar

0

0

0

3

1

FLNG

1

3

1

1

2

TLP

2

1

1

0

1

Hull Award Year Source: Quest Offshore Resources, Inc.

26

World Wide FPSO Awards 2010 (e) – 2014 (e) Mean Case

35

Number of FPS Units

30 25 20 15 10 5 0 2010

2011

2012

2013

2014

Hull Award Year Africa/Medit.

Asia Pacific/Middle East

North Am erica

North Sea/Arctic

South Am erica

Source: Quest Offshore Resources, Inc.

27

Worldwide Forecast FPS Spending by Year (Mean Case) Regional Contribution Millions of US Dollars by FPS Award Year South America and Asia will be the key drivers for increases in spending, while the project mix causes spending to drop off in 2012 despite an increase in the number of units awarded.

$25,000,000

Thousands of US Dollars

$20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Hull Award Year Africa/ M edit. North America South America

Asia P acific/ M iddle East North Sea/ Arctic

Source: Quest Offshore Resources, Inc.

28

Worldwide Forecast FPS Spending by Year Type Contribution Millions of US Dollars by FPS Award Year $25,000,000

Thousands of US Dollars

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$0 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Hull Award Year FP SO

FP S-Semi

Spar

FLNG

TLP

Source: Quest Offshore Resources, Inc.

29

Forecast FPSO Spending by Year (Mean Case) Millions of US Dollars by Region by FPS Award Year Despite the large numbers of Asian FPSO units to be awarded, their relatively low value decreases their importance to spending.

$14,000,000

Thousands of US Dollars

$12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Hull Award Year Africa/ M edit. North America South America

Asia P acific/ M iddle East North Sea/ Arctic

Source file: Award_ Working_Q4_2009.xls

30

Leased FPS Units

31

Forecasted Off Contract FPS Leased Fleet Availability by Type and Year 2010-2014 (Likely to be retired and EWT excluded)

Number of Units

10

8

6

4

2

0 FPSO

2010

2011

2012

2013

2014

9

0

1

3

6

Year FPSO

Source: Quest Offshore Resources, Inc.

32

Leased FPSO Market Share by Owner Owners with >1 Unit 3%

5%

8%

Aker Floating Production Bluewater Offshore

5%

Bumi Armada

8%

BW Offshore 3%

3%

FPS Ocean Fred Olsen Production 10%

Maersk MODEC

14%

Nexus/APL 3% 3% 3%

9%

Nortech Prosafe Production SBM Sea Production

3%

17%

Sevan Marine Tanker Pacific

3%

Teekay Shipping Corp

Includes JV Shares

Source: Quest Offshore Resources, Inc.

33

Leased FPSO Market Share by Owner Owners with >1 Unit Owner MODEC SBM BW Offshore Bluewater Offshore Prosafe Production Sevan Marine Aker Floating Production Teekay Shipping Corp. Bumi Armada Fred Olsen Production Maersk Nexus Nortech SBM/MISC Tanker Pacific Other Grand Total

Grand Total Percentage 15 16.3% 12 13.0% 9 9.8% 7 7.6% 7 7.6% 6 6.5% 4 4.3% 4 4.3% 2 2.2% 2 2.2% 2 2.2% 2 2.2% 2 2.2% 2 2.2% 2 2.2% 14 15.2% 92 100.0%

Includes JV Shares

Source: Quest Offshore Resources, Inc.

34

oy al D

C N O O

il

he ll

St at o

ut ch /S

bp

ra s

C

he vr o

n

H

es s

En i

To ta on l oc oP hi lli ps

C

C Ex A xo na nM da ob rk il o Pe tr ol eu m

R

Pe tr ob

Number of Units

Operator Owned FPS Market Share by Owner 18

16

14

12

10

8

6

4

2

0

Operator

Source: Quest Offshore Resources, Inc.

35

Global Hull Fabrication Analysis

36

Market Share – FPSO Hull Fabrication (Number of Units) Major FPS Shipyards 2003-2010 By Fabrication Start Year 12

Number of Units

10

8

6

4

2

0 2003

2004

2005

2006

2007

2008

2009

2010

Construction Start Year

COSCO

DSME

Dubai Dry Docks

HHI

Jurong

Keppel FELS

Source: Quest Offshore Resources, Inc.

SHI

Yantai Raffles

37

Market Share – FPSO Topsides Fabrication (Number of Units) Major FPS Shipyards 2003-2010 By Fabrication Start Year 12 11 10

Number of Units

9 8 7 6 5 4 3 2 1 0 2003

2004

2005

2006

2007

2008

2009

2010

Construction Start Year Aker Verdal

COSCO

DSME

Dubai Dry Docks

HHI

J Ray - Batam

Jurong

Keppel FELS

SHI

SMOE / Sem baw ang

Yantai Raffles

Source: Quest Offshore Resources, Inc.

38

Market Share – FPS-Semi Hull Fabrication (Number of Units) Major FPS Shipyards 2003-2010 By Fabrication Start Year 4

Number of Units

3

2

1

0 2003

2004

2005

2006

2007

Construction Start Year

Aker Verdal

DSME

Jurong

Keppel FELS

Source: Quest Offshore Resources, Inc.

MMHE

SHI

39

Market Share – FPS-Semi Topsides Fabrication (Number of Units) Major FPS Shipyards 2003-2010 By Fabrication Start Year 4

Number of Units

3

2

1

0 2003

2004

2005

2006

2007

Construction Start Year

Aker Verdal

Gulf Island Marine

J Ray - Morgan City

Keppel FELS

Source: Quest Offshore Resources, Inc.

Kiew itt

MMHE

40

Conclusions

41

Conclusions



MOPS market continues to expand



Leased FPSOs are approximately 1/2 of the FPSO market



FPSOs are by far the most common type of MOPS



A number of FPSO units are available today



Floating Production Systems are the only option for surface facilities in water depths greater than 1,750 ft

42

Questions?

43

Selecting a MOPS Unit Type: Principal Determining Criteria 

Surface or Subsea Completions



Need for Well Access and Intervention



Drilling Program Requirements



Access to Existing Hydrocarbon Export Infrastructure



Water Depth and Environmental Regime



Size and weight of process equipment

44

Principal Operational Sensitivities



Oil Export Method / Storage and Offloading Systems



Environmental Parameters and the Mooring System  Permanent moorings  Disconnectable options  Weathervaning (single-point) vs. spread moorings



Process System Sensitivities

45

Operational Considerations



System Availability / Uptime  Is redundancy required?  What cost for the final %?



Achieving Safety and Environmental Protection Objectives



Recruiting and Retaining Competent Crew



Maintenance Criteria

46