Offshore Market Outlook
Contents of the Presentation I. What is Offshore Business II. Offshore Market Outlook III. Deltamarin Offshore Services
What is Offshore Business Offshore is all activities done on sea relating to Oil & Gas operations. It starts from 1. Seismic/Geological surveys 2. Exploration drilling/production Drilling 3. Field Development 4. Field construction/subsea 5. Production (Upstream) 6. Downstream
What is Offshore Business What is the most significant difference in offshore to ships? Offshore installations are on the sea all the time no matter what weather conditions are and they are not freely moving vessels, but in most cases moored on the spot. Some units are DP and thus are more similar to ships, but design requirements are much higher.
What is Offshore Business Offshore has sarted in shallow waters, less that 500 meters deep already about 100 years ago. It has been moving to deeper waters since a long time already. Deep water is 500 to 1500 meter. Beyond 1500 is called ultra deep. Today the growth in Offshore business is almost only in ultra deep water, 1500 m and deeper.
What is Offshore Business Typical offshore installations:
What is Offshore Business Field development In field development you develop the field structure starting from subsea and ending in tie-back to existing production facilities or developing a new production facility. This can be production platform, like: semisub, TLP, Spar or FPSO.
What is Offshore Business Main businesses in Offshore: Exploration Drilling Subsea construction Subsea equipment manufacturing Other equipment manufacturing FPS Design FPS Construction FPS Operation Services
What is Offshore Business Typical FPSO project (Conversions or Newbuilds): Conceptual Design FEED/Basic Design Classification Detailed Engineering Production Engineering Project Management 1000 to 10 000 hours 10 000 to 200 000 hours FPSO = FloatingProductionStorageOffloading
What is Offshore Business
What is Offshore Business Offshore projects are different than typical ship design projects. In offshore projects you do very much more analysis, studies and reports. E.g. in structural analysis you need to have detailed reports where you show all the steps what you have done, not only results.
What is Offshore Business FLNG is another new type of business. There are a couple of Companies planning to build floating LNG FPSO = FLNG. Investment is huge and there is no evidence that liquefaction will work in higher sea states. Risky business.
Offshore Market Outlook In the following slides I show you some basic information regarding Offshore FPS (Floating Production System) market.
Oil demand continues to increase Source: Douglas-Westwood, Global Offshore Prospects June 2010 > Oil demand is the key driver of Offshore market > Oil is the fuel of transportation > Oil demand will increase by 28% by 2035 (EIA) > Oil demand growth is led by developing economies; China and India > Daily oil production is about +80 mbbl
Deep water oil is essential > World oil supplies will limit and supply is unlikely to keep up with demand in the long run > Offshore is one of the few remaining places where oil production can still be increased; especially deep water
Deep water oil is essential > Deep water represents 85% of Offshore production in 2010 and the trend is upwards
Huge investments are needed to maintain oil production capacity Global Offshore Oil & Gas Production and Spend to Grow Source: Douglas-Westwood, Global Offshore Prospects June 2010
Only deep water production is likely to grow after 2015 > Offshore oil of global output: 33% / 2010 35% / 2020 Source: Douglas-Westwood, Global Offshore Prospects September 2010 > Deep water output: 3% / 2002 6% / 2007 10% / 2012
Only deep water production is likely to grow after 2015
Expected deep water investment $137 billion / next five years Deep water Capex Source: Douglas-Westwood, Global Offshore Prospects September 2010
Expected deep water investment in Brasil alone $200 billion / next four y > Brasilian spending budgeted for ab. 200 billion until end 2014 > It is so much that it seems hard to be executed > It would be like 200 Oasis of the Seas projects > It would mean starting a 1 billion project per week
Asia is the key location of building Offshore vessels > Offshore vessels are constructed in more than 30 countries > South Korea is the leader in bigger vessel and China in smaller vessel construction > Huge investments have increased shipyard capacity in Asia > Many shipyards are shifting their focus to offshore and special vessels
Effects of BP s oil spill > Major and far-reaching impact for the industry, especially for deep water projects > US six months deep water drilling ban > Decreased production capacity > Project and investment decision delays > Worldwide examination of practices > Tighter safety and environmental legislation > Cost increases > Possible that only the largest companies can participate deep water drilling business in the future > Higher oil price is probable > Request for innovations and technology developments > New challenges and opportunities
Oil price is important factor in offshore business > Three alternative scenarios of oil price development (EIA): Oil price will increase to $210/barrel by 2035 Oil price will decrease to $51/barrel by 2035 Oil price will increase to $133/barrel by 2035 Last one is seen as the most probable scenario Nowadays oil price $70-80/barrel is the minimum price for oil companies to keep the business profitable
Future outlook of Offshore market > Offshore market has been slow for almost two years now > The long-term future looks optimistic but it is difficult to say when proper recovery will begin > Financing and risk mitigation play vital role when placing newbuilding orders > New projects are more cost driven than before but focus is still too much on first cost, not the project economy (=lowest life cycle expense)
Future outlook of Offshore market > The fact is that the deepwater oil is needed
FPSO dominance in Offshore installations
Deltamarin in Offshore > Main focus in floating production (FPSO, EWTU, FDPSO, FSO) > Also pipelayers, drillships and semisubmersibles > Other work like Aker Solution CGBS projects like Sakhalin I & II In production GUANAMBI I DM Design: Soon in production DM Design: In production
Deltamarin in Offshore > Capabilities cover all phases from concept development, FEED and classification design down to detailed engineering, production engineering and site supervision > Specific skills in 3-D modelling, HSE analyses, CFD, FEA, DP and motion analyses, launch analyses. Broad arctic expertise based on icegoing vessels and winterization projects. Sakhalin II Troll A living Q Fatigue analysis for Leirvik, aluminium structure COOEC Hysy 229 Jacket Launch Analysis and barge modification for Float over
Offshore Projects > Major clients: Bluewater, Allseas, Petrobras, Total, Saipem, Aker Solutions, Petroserv, Transocean, CNOOC/COOEC > Smart partners: USOS in specific ship concepts, Pyramid in topside engineering, DeepSea in subsea engineering, SaS in HSE & Safety studies, GL Noble Denton in FMEA/FMECA studies, Basstech in Semisubs, Petromaritime FPSO s,
i-fs integrated Floating Solutions Full Field Package: Subsea Hull (Vessel) Topside (Process Modules)
Deltamarin Your FPSO Engineering Partner & Expert Contact Person: Timo Granberg Sales Director Offshore +358405369698 timo.granberg@deltamarin.com