fpso benchmarking report 2000

Performance Forum

Final Report

On

FPSO

Cost & Schedule

Performance Study

Phase I

September 2000

Pace Project Services Ltd5 St Vincent StreetEdinburghEH3 6SW

Tel: +44 (0) 131 220 4242Fax: +44 (0) 131 225 7299E-mail: [email protected]

Issue No 1565/031/028

e - distribution

PERFORMANCE FORUM – FINAL REPORTFPSO COST AND SCHEDULE PERFORMANCE

Pace Project Services Ltd Issue No. 1 of 66565/031/028

Page No.

1.0 Foreword 3

2.0 Executive Summary 5

3.0 Introduction 12Study Synopsis 13Performance Forum 14

4.0 Overview 15Study Initiative 16Funding 17Study Process 18Methodology 19Deliverables 20Participants Response 21

5.0 Study Findings 23Cost, Schedule and Technical Analysis 24Business Analysis 28Charts 33Conclusions and Way Forward 51

Appendices 52Appendix I Participants Response to Study

and Interim Report 53Appendix II Participating Companies 54Appendix III Work Breakdown Structure 55Appendix IV Target FPSO 56Appendix V Questionnaire Template and

Definition of Terms 57

This report has been compiled using the best information available at the time ofpreparation. Pace Project Services Ltd do not accept responsibility or liability for anyreliance upon the information contained herein.

TABLE OFCONTENTS



1.0 FOREWORD



This Final Report concludes phase one of the FPSO cost and schedule

performance study for the United Kingdom Continental Shelf (UKCS),

Norwegian Continental Shelf (NCS), Australian Northwest Shelf/Timor

Sea (ANWS) and Canadian Northwest Atlantic (NWA) sectors. The layout

of this report follows the format established at the interim report, issued in

February 2000, presenting results first on FPSO facility information

cascading down to elements and functions by topsides, hull and turret.

Each section is followed by appropriate technical analysis. This final

report is a comprehensive and complete document and can be read

independently of the interim report.

The report includes all of the 23 original charts from the interim report and

an additional 11 new charts showing more detailed analysis relating to

topsides, hull conversions and turrets. The charts have been organised

following the structure described above, as a consequence the chart

numbers are not necessarily the same as in the interim report.

Clarifications to the supplied data have resulted in minor changes to the

original charts but the trendline curves remain almost identical.

The additional data and clarified information received since issuing the

interim report has permitted the production of a limited number of more in-

depth metrics, such as cost per tonne for the engineering, materials and

joint fabrication/integration functions; and manhours per tonne for the

engineering and joint fabrication/integration functions. The results of these

bring an enhanced understanding of performance of topsides delivery.

Indicative metrics for turrets, which vary widely technically, have been

developed. The results try to cross the spectrum of technical solutions to

provide an overall indication of performance, irrespective of the selected

option. The curves provide a sense check and a guide to ranges norms

for an FPSO turret.

The response to requests for additional data following the issue of the

interim report mirrored the original effort. Sufficient clarification and fresh

data was received to permit the additional analysis resulting in the new

charts, however the observations made and the conclusions drawn at the

interim stage on the level of response from participants remain valid. The

Executive Summary and Study Findings sections have been modified only

to reflect additional information gleaned from the new charts. The

Introduction, Overview and Appendices sections are unchanged from the

Interim Report other than to remove reference to this Final Report.

1.0 FOREWARD1.0 FOREWORD



2.0 EXECUTIVE SUMMARY



Overview

An increasing number of development opportunities that could

successfully employ floating production storage and offloading (FPSO)

vessels, as part of the development solution, has prompted several

requests from operators for performance information on FPSO capex -

cost and schedule. This study, initiated by the Performance Forum

members (PF - see section 2), attempts to establish the past andcurrent cost, schedule and technical performance within the oil andgas industry for FPSO.

The study aims to provide a comprehensive report and overview of cost,

schedule, technical and business statistics on both new build and

conversion FPSO. This initiative is intended to be self-funding, using the

existing PF processes (see section 3). The vessels targeted include 26

new build and conversion FPSO with start-up post 1994, in the UKCS,

NCS, NWA and ANWS regions.

FPSO activity globally remains high with a recent report by Norland

Consultants forecasting 53 shipshaped FPSO to be installed in the

offshore regions of the world by 2004. General sentiment in the industry

is that, if performance is genuinely to be improved, there is a need for amore open approach towards sharing feedback and benchmarkinginformation. Establishing or identifying a forum where the industry can

confidently exchange information and establish joint initiatives without

compromising individual projects or company confidentiality is a first step

in satisfying this need. The PF, through this study, has initiated a

process to take FPSO benchmarking forward and to facilitate improved

performance.

2.0 EXECUTIVESUMMARY



Participants Response

The total response to EPC, technical and general questions was good at

73%, reflecting the weighted-average of the technical and general over

the EPC questions. Engineering, procurement and construction (EPC)

cost and schedule information provided was less than expected, however,

the level of response to detailed cost and schedule information onthe questionnaires was well below expectations. One upside to this is

that for each FPSO the responses were either at the detailed or EPC

level, giving jointly a reasonable selection of data to analyse. This level of

response, however, suggests one of two scenarios:

1) that detailed cost and schedule information is not readilyavailable, or

2) an unwillingness to divulge and share information forbenchmarking purposes.

Achieving the original study aims has proved difficult given this level of

detailed response. However, amalgamating the detailed and EPC data,

with reference to existing PF and PFA data, has permitted the

development of a number of useful performance metrics shown on a

variety of scatter and pie charts. No data points have been identified by

FPSO name on the charts. Where it is believed individual data pointswould allow identification of a specific FPSO, in accordance with therequests of participants, these have been hidden from the chart. The

data has, however, been included in calculating the trendlines curves,

which are of the “power” type shown, in the past, to give the best fit for

this type of data.

Study Findings

General

Analysis on the elements of the vessel in sail away condition, i.e. hull,

topsides, turret has been undertaken. Cost and schedule metrics have

been generated along with technical statistics for the hull and topside

elements of FPSO. Indicative allocations for FPSO elements and

topsides functions have also been produced with the data provided. A

clear result from the analysis, and a key issue for initiating the study, is

that FPSO consistently exceed budget in cost terms and arecompleted later than planned. These trends shown in the analysis are

reinforced by anecdotal evidence from public domain sources.




Several metrics for internal turrets have been developed that attempt to

cross the spectrum of technological solutions. The wide variety of turret

types and technological differences result in a wide scatter of data points,

however, the resultant trendline provides an overall indication of out-turn

performance and a guide on range norms for internal turrets.

The small sample of data for moorings, risers and offshore elements of

FPSO have precluded the production of metrics for these categories. It is

hoped that information relating to risers can be made available from

participants in phase II of the study, as there is considerable interest in

this element of work, particularly in relation to deep water.

Performance

The study findings indicate the primary element suffering the costoverruns and schedule delays is the FPSO topsides. Examination of

the data suggests the three principal technical reasons for this are:

• growth in technical parameters, e.g. increased weight/throughput.

• integration issues, e.g. hull upgrades, PAU interconnections.

• adoption of increasingly sophisticated equipment, e.g. process

and control.

It should be noted that a contributing factor to the delays in completion of

topsides integration is the layout of PAU on FPSO constrained by the

vessel beam. This might not be fully understood when sanction budgets

and schedules are being prepared.

Also a large proportion of recent FPSO projects have been the subject of

litigation or contractual claims which might indicate there is a problem with

contracting strategies. Whereas, on recent conventional platform projects

litigation or contractual claims have not been particularly evident.

Early definition of technical parameters and a clearly definedexecution and contracting strategy were identified as prerequisitesfor success. This supports earlier comment where growth in technical

parameters has been recognised as a key contributor to the cost

increases and schedule delays. Establishing realistic baselines -

technical, cost, and schedule, from the outset will assist in delivering

projects to plan.




Contractor Experience

From the data provided a pattern emerges, which is that fewengineering, fabrication or integration companies have completedtwo or more FPSO. This is true for all functions (refer to work breakdown

structure in Appendix II), excluding hull engineering and construction

where a number of players dominate the market. This pattern is

reinforced by information in published literature on FPSO (OPL Mobile

Production Systems of the World) where experience on FPSO has been

limited to a small number of projects, sometimes years apart. The above

suggests that, even for companies with experience on more than oneFPSO, it is unlikely the same core team would have been responsiblefor the work.

The data from this study confirms that the FPSO industry is a global

business and reinforces the idea, identified in a paper to the OTC by

Farrell and Watzke, that national, industry and company culturesmust all be managed if a project is to be successful. Responses also

support the expansion of this idea by J Melvyn Green who, in a later

paper to the OTC, identified that the problems cultural issues presentvery often do not become apparent until later in the project lifecycle,often during construction, when generating solutions is more difficult.

One factor that has emerged, and a common problem on many FPSO

projects, is the culture clash between the shipbuilding and offshoreindustries. This results primarily from differences in specification andstandards between the two industries. Shipping standards, where

vessels are inspected annually and are subject to five-year dry dock

inspections, do not meet the requirements for an FPSO with a long

operational life with possible 20-25 years on location.

It is therefore important that when planning an FPSO project adequate

effort and attention is given to identifying and managing the culturalinfluences and interfaces. Included in this are the issues of languageand location, which on projects involving global participation must all be

managed.




Lessons learned and sharing of feedback within the industry has been

identified as a shortcoming. Not all companies require projects to go

through this process whereas others produce and publish thorough

reports for the benefit of all. In short, the lessons learned andexperience gained from each project is often lost to the industry.

Painful experiences, in terms of cost and schedule, are often

unnecessarily repeated.

Consultant’s Comments

The key issues identified in the study raise a number of questions to be

asked of all potential FPSO projects:

• Have correct/valid norms been used in the sanction estimate?

• Have correct/valid durations been applied to the sanction schedule?

• Have cultural/soft issues for project been adequately addressed?

• Have the development concept/technical parameters been fixed?

• Have FPSO industry ‘lessons learned’ been recycled to project?

• Has an execution strategy been agreed – is it right?

• Has a contracting strategy been agreed – is it right?

• Has risk analysis been performed?

• Has the project been benchmarked? Where is the project positioned?

• Is FPSO best in class? Worst in class? If so, why? What is different?

• What are you doing differently and will it make a difference?

Opportunities/Way Forward

Having initiated a process and delivered results, the opportunity to

develop the study and take it into a second phase clearly exists. Before

proceeding to a second phase, however, a workshop is planned forNovemeber 2, 2000 where the results of the final report will bepresented, discussed and challenged. Guest speakers from operators,

contractors, ship owners and ship builders will share experiences and

present their views relating to cost and schedule performance on FPSO

developments.




It is proposed the key issues to be addressed in a second phase, should

sufficient support and interest be obtained, would include but not be

limited to the following:

• Increase the sample with FPSO from West Africa, Brazil, Far East.

• Investigate and recycle industry experience, i.e. ‘lessons learned’

commercial, schedule, technical and business issues.

• Investigate business strategies on own/lease options.

• Develop standard management and project control processes.

The PF Consultant would welcome recommendations on specific

company issues or desired areas of focus to be addressed in a second

phase or at the November 2, 2000 workshop. Details should be

addressed to e-mail <[email protected]>.


mailto:[email protected]



3.0 INTRODUCTION



Study Synopsis

Following a number of requests from operators for information on FPSO

capex, both cost and schedule, the PF members have taken the decision

to initiate a jointly funded study to establish the past and current cost and

schedule performance within the oil and gas industry for FPSO. The

increased FPSO activity results primarily from an increasing number of

development opportunities worldwide. The key issues are:

• Perception in the oil and gas industry – poor capex performance

• Oil and gas industry nervous of future performance

• Identification of world-wide experience and major participants

• Opportunity to improve communication between all parties within

FPSO industry

• Identify realistic metrics and benchmarks

• Promote improved performance

To enhance the cost and schedule metrics, it was envisioned that

valuable technical benchmarks could also be developed.

The study was launched on 9 September 1999 with 24 participants (refer

to Appendix 1) and a target of 26 FPSO (refer to Appendix III) in the

UKCS, NCS, NWA and ANWS regions. These locations were selected, as

it was believed, data would be readily available and comparable statistics

could be drawn for FPSO built to a ‘similar’ specification and standard of

operation.

The original timetable envisaged completion by December 1999.

Unfortunately this date has slipped due to slow return of questionnaires,

with in many cases, incomplete data. This has resulted in an increased

volume of research undertaken by the Edinburgh based study team,

which has in turn delayed the data analysis effort. As a consequence, an

interim report was issued covering the items where sufficient data was

available, including the vessel in sail away condition, hull, topsides, turret.

The other elements of FPSO are not covered here, e.g. risers, moorings

or, for conversions, the purchase price of the vessel as information was

not available from the majority of participants.

3.0 INTRODUCTION



Performance Forum

The Performance Forum (PF) is a co-operative oil and gas industry

initiative, set up to measure and compare the performance of production

facilities in terms of their total life cycle costs. This means taking into

account not only capital cost but also operating and decommissioning

costs. The purpose of this report is, however, to measure performance in

terms of capital cost (capex) and schedule durations for FPSO vessels.

The PF offers a practical way to establish realistic targets for reduced

barrel costs and improved production methods in oil and gas fields. At its

heart is the PERFORMER database containing recorded costs and

schedules of a number of recent developments. By establishing common

terminology and consistency of data, the database allows realistic

comparisons to be made between different projects.

Participating oil and gas companies are responsible for planning the

structure and overall direction of the initiative. The PF is administered by

Pace Project Services Ltd, an independent consultant, who collects,

validates, holds and analyses the data. This not only ensures

confidentiality in respect of raw data but also helps to maintain a

consistency of analysis.

Further information is available on the PF website:

www.performance-forum.com

3.0 INTRODUCTION

http://www.performance-forum.com/



4.0 OVERVIEW



Study Initiative

The study initiative aimed to provide a comprehensive report and

overview of cost, schedule, technical and business statistics on both new

build and conversion FPSO. Also, the study aimed to identify the

strengths and weakness of the international oil and gas industry to serve

the FPSO market, and key areas of competency and competitiveness.

The vessels targeted include new build and conversion FPSO with start-

up post 1994.

The study data provided by the participants would be merged with the

current data held by the PF and PF Australia (PFA). It was envisaged that

the study would identify key statistics on cost and schedule related to

technical parameters and also produce range norms for both new build

and conversion FPSO.

Requests for analysis on FPSO outside the targeted locations were

requested, however, it was proposed to expand the study into these areas

in a later phase should there be sufficient continued participation.

Security of data is of the highest priority. To guarantee security and

confidentiality of data supplied by all of the participants the study is

managed and administered within the approved PF processes developed

since inception in 1993.

4.0 OVERVIEW



Study Funding

The study was designed to be self funded with the participants and the

current PF and PFA members providing data, funding or a mix of both.

Other interested organisations were approached with a view to obtaining

supplementary funding to finance the study for which agreements have

yet to be reached.

The total cost of the study was estimated at £45,000 with the following

sources of funding:

• PF and PFA to part fund study (25% of £45,000)

• Invitation to operators, engineers, contractors, shipbuilders,

consultants, etc. (data and/or funding - £2,500 or US$4,000)

Funds raised from third parties to date amount to £27,500. The resultant

shortfall has yet to be secured, however, Pace continues to encourage

other parties to participate.

4.0 OVERVIEW



Study Process

The PF capex performance measurement process has been developed

and implemented since 1993. The PF continues to provide its members

with independent and validated performance reports covering many areas

of the offshore industry. PF practices were utilised within the FPSO study

to ensure that all data was processed and stored within approved

procedures. Study phases are:

• Preparation of questionnaire template for data

• Collection of data

• Validation and analysis of data

• Provision of report

• Workshop (planned 2 November, 2000)

The questionnaire responses are discussed in detail later, however, it

should be noted that fewer than expected respondents provided detailed

data with respect to cost and schedule and much of the data relating to

manhours is imprecise. This has made achieving the overall study aims

difficult, however, where detailed data is missing EPC data has been

used. Some public domain data has also been used, primarily technical

data. Where public domain data has been referenced the source has

been noted.

4.0 OVERVIEW



Methodology

The data analysed is that provided by study participants returned in

standard questionnaires, and with reference to data contained within the

PF and PFA databases. The data submitted in the questionnaires has

been consolidated in a single excel workbook. Every effort has been

made to validate technical information and verify that in each case the

cost and schedule information is correct to compare like for like. After

analysis, metrics have been developed and a variety of pie and scatter

charts have been produced.

The charts contained in this report were prepared in accordance with the

PF definition of terms and the standard data collection methods described

above. Comparisons are shown in the form of scatter charts. No data

points have been identified by FPSO name. Where it is believed

individual data points would allow identification of specific FPSO, in

accordance with the requests of participants, these have been hidden

from the chart. The data, however, has been included in calculating the

trendline curves. Each scatter chart contains a regression trendline of the

“power” type, which has been found in the past, to produce the best fit for

this type of data. The following points should be noted:

• All cost data is as reported and no escalation or normalisation has

taken place.

• Gas has been converted to oil equivalent using a conversion factor of

1 boe = 155 Sm3.

• The term ‘throughput’ refers to design oil and gas production rate.

• All weights are net dry installed in tonnes.

• Operator/owner project management costs are excluded.

• Data points shown on the charts are taken from new build and

conversion FPSO, deployed on oil and gas developments located in

the UKCS, NCS, NWA and Australian NWS/TS.

• A wide variety of vessels have been used to prepare the charts. The

trendlines do however, given the lower than expected level of

response, provide a reasonable indication of achieved norms.

Those not familiar with the PF definition of terms should refer to the

Definition of Terms attached to the sample questionnaire in Appendix IV.

4.0 OVERVIEW



Deliverables

The study deliverable is a report that includes analysis relating to the

performance of the FPSO industry, i.e. cost, schedule, technical and

business issues for the UKCS, NCS, NWA, NWS/TS regions. It had been

intended to categorise results are by ‘New Build’ and ‘Conversion’ type

FPSO, however this has not been possible due to the limited data on the

purchase price of conversion vessels. It is recognised that the study will

not capture every FPSO from the 4 regions but concentrates on the FPSO

vessels installed post 1994.

Results are presented for all FPSO for which data is available. Therefore

the sample of data points for general and technical analysis may be

greater than the sample for cost and schedule analysis. Results include:

• General FPSO statistics and information.

• Industry statistics and data.

• Trends and metrics for the complete vessel and major elements, i.e.

hull, topsides, turret.

• Report to all participants.

• Workshop to review and challenge the results.

4.0 OVERVIEW



Participants Response

Interest in the study was high and it was envisaged that response to the

questionnaire would be timely and positive. The reality however has

proven more difficult with the latest reply arriving at the end of August

2000. Of the 26 FPSO for which data was requested questionnaires were

returned for 17 facilities. Two questionnaires were returned for FPSO

outwith the target. The data for these two FPSO has been analysed but

not included in the charts and metrics produced, as they vessels were

deemed to be outwith the study specification.

Categorising the requests for information into general, technical, cost and

schedule data, the level of response was as shown in the following table

for detailed and EPC requests:

RESPONSE TO QUESTIONNAIRES FOR FPSO STUDY

DETAILED DATA

General 85%

Technical Data 79%

Schedule Data 25%

Cost Data 16%

Detail Data – Technical, Cost and Schedule 33%

Total Detailed Questions 45%

EPC DATA

EPC Schedule Data 41%

EPC Cost Data 35%

Total General, Technical, EPC Cost and Schedule 73%

Responses to general and technical information questions were high at

85% and 79% respectively. Validation of the responses revealed detailed

and accurate information has been provided. This supports the keen

interest and the level of participation in the study.

4.0 OVERVIEW



The total of EPC, technical and general questions had a 73% response

rate, which reflects the weighted average of the combined general and

technical questions over the EPC questions. EPC cost and schedule

information was higher than the detailed responses at 35% and 41%

respectively, but well below expectations. Replies to detailed cost and

schedule information was lower than expected with 16% and 25%

respectively. One upside to these statistics is that for each FPSO the

responses were either detailed or EPC giving jointly a reasonable

selection of data to analyse.

This level of response, however, suggests one of two scenarios:

1) that detailed cost and schedule information is not readily available, or

2) an unwillingness to divulge and share information for benchmarking

purposes.

The latter argument is echoed by Tony Brown of Woodside (Laminaria)

who feels there is generally a distinct reserve in the industry about sharing

feedback and benchmarking information (Offshore Engineer Jan. 2000).

Achieving the overall study aims has proved difficult given this level of

detailed response. However, amalgamating the detailed and EPC data,

and with reference to existing PF and PFA data, has permitted the

development of a significant number of metrics.

4.0 OVERVIEW



5.0 STUDY FINDINGS



Cost, Schedule and Technical Analysis

As suspected, and a key driver in initiating the study, results of the data

analysis show that FPSO consistently cost more and take longer to build

than planned. The key element where cost and schedule delays are most

prominent is with topsides fabrication and integration. Reported costs for

the hull and turret show minor cost and schedule overruns. This might be

expected given the indicative element distribution (chart 4), which shows

topsides costs at 50% of the total FPSO and, for the most recent FPSO

(chart 5), higher still at 60%.

Facility level analysis has produced metrics for the total FPSO (hull, turret

and topsides) per recoverable reserves (chart 1) and per topsides design

throughput (chart 3). The trends from these curves are as might be

expected. Technical analysis at this level has been limited to the number

of beds per thousand of boed, and FPSO deadweight to storage capacity.

The accommodation analysis shows an excellent trend over wide range of

throughputs and enables calculation of the number of beds that might be

required for a facility of a particular throughput (chart 6). Analysis of

FPSO deadweight shows a close correlation to storage capacity as would

be expected (chart 7).

A review of the sanction to start up information (chart 2) revealed a genral

delay of circa 5 months. Further analysis shows that typically FPSO

project work begins long before formal sanction is received. A simple

comparison with the topside element durations shows a significant jump

on activities. Actual versus planned sanction to start up curves have been

included, despite the conflicting information relative to EPC activities.

However, this chart carries the appropriate “health warning”.

Surprisingly, analysis of topsides cost per boed (charts 8 and 10) shows

better performance, actual versus planned, on the higher throughput

FPSO than the lower, but still incurring substantial cost overruns. The

limited data points at the higher boed end of the scale might skew the

trend, however the shape and planned to actual delta remain valid.

Comparing these results with conventional platform topsides (chart 9) a

similar trend is found with topsides cost per boed falling with increasing

throughput. This trend might be explained by the fact that heavier

topsides are naturally more complex and by the fact that heavier topsides

cost more per tonne than their lighter counterparts (chart 11).

5.0 STUDYFINDINGS



When topside costs are analysed by topsides weight (chart 12) the

opposite is true, with the heavier topsides trend showing significantly

greater cost overruns than the lower weight topsides. Note, however, for

this analysis actual weight has been used as the divisor for both planned

and actual cost. Analysis of the limited planned weight information shows

the increases in absolute cost are greater than increases in cost per

tonne, when expressed as a percentage of original budget. This would

suggest that other factors over and above the increase in topsides weight

contribute to the cost overruns.

Schedule analysis of topsides activities (charts 13 - 16), i.e start of

engineering to end of integration, show a trend with a consistent five

month delay. This is true for analysis on a throughput or weight basis,

which may be more indicative of the magnitude of delays experience on

the total FPSO.

Technical analysis of topsides has been limited to topsides design

throughput per tonne (chart 17). The trend from this chart is as might be

expected with boed per tonne rising with increasing throughput. The

shape of the curve is comparable to that for conventional platforms (chart

18), however, the barrels per tonne achieved on an FPSO is greater. This

is primarily because conventional platforms have substantial primary steel

not required on FPSO and often have drilling facilities. As a consequence

conventional topsides achieve considerably lower barrels per tonne.

An analysis of topsides weight growth has been undertaken (chart 19),

which shows weight increases of between 15-20 percent. The trend

indicates lighter topsides incur greater percentage growth than their

heavier counterparts.

The indicative function distribution for an FPSO topsides (chart 20),

surprisingly shows the material cost at 43% of the total with fabrication,

integration and engineering at 25%, 19% and 13% respectively. The

material function appears higher than would initially be expected,

however, this is possibly due to certain fabrication costs for pre-

assembled units (PAU) being reported as a material cost item.

Analysis of the topsides engineering, materials, fabrication and integration

function costs per tonne show consistent results (charts 21, 23, & 24).

Engineering, materials and joint fabrication/integration costs per tonne

rising with increasing weight. The fabrication and integration functions are

5.0 STUDYFINDINGS



shown together, as when viewed independently give misleading results

due to the blurred delineation between end of fabrication and start of

integration activities. These results are similar to conventional platform

trends.

Topsides manhours per tonne metrics have been produced for

engineering (Chart No 22) and, for similar reasons to above, fabrication

and integration activities jointly (Chart No 25). The results show for

engineering a trend of increasing manhours per tonne with increasing

weight and relatively flat manhours per tonne for fabrication and

integration. However, it is acknowledged the scatter of the data points on

both charts are wide, most likely as a result of the inherent difficulties with

manhour reporting.

Analysis of the hull data has not permitted categorisation of newbuild and

conversions as would have been liked. Limited information on the

purchase price of the vessel was provided for conversions, and therefore

few meaningful statistics could be developed.

However, hull newbuild costs have been analysed along with hull

newbuild durations (chart Nos 26 & 27). The indicate the cost per barrel

of storage decreasing with increasing storage and a similar result for

deadweight tonnage. This is as might be expected given the close

correlation between storage capacity and deadweight tonnage.

Hull conversion costs have also been analysed (Chart No 28) and, as

would be expected, the results show decreasing costs per barrel as

storage capacity increases. The trend curve is calculated on three of the

five hull conversions in the target sample. Although the data is limited to

the three vessels, the curve has been included as the resulting trend

seems reasonable.

Schedule analysis of actual versus planned newbuild hull durations shows

completion on, or about, planned dates. The sample of data points is

small, however the trend is that hull delivery is not a major contributor to

delays on FPSO facilities. Evidence from the sanction to start up analysis

shows that operators/owners are not risk averse to commencement of

work on the hull prior to receipt of the formal sanction.

Analysis of cost and technical data for turrets has produced four

meaningful trends. The variety of turret designs and technical options

5.0 STUDYFINDINGS



contribute to the wide scatter on these charts. However the resulting

trends are indicative of what would be expected with cost per turret weight

(chart 31) and cost per topsides design throughput (chart 32) both

showing increasing cost with increasing weight or design throughput.

Turret weight expressed against riser capacity in absolute terms (chart 33)

gives an indication of the number of risers that could be expected at a

given turret weight. Lastly turret weight expressed as a function of

thousands of barrels of throughput provides a check on the expected

turret weight for a given throughput. Together the turret analysis provides

a sense check on turret weights, riser capacity and cost. However these

charts carry appropriate health warnings and must be viewed in the

context of the complex issues surrounding the selection of turret solutions.

Thus, the evidence suggests the primary element suffering the cost

overruns and schedule delays is the FPSO topsides. The data suggests

three principal reasons for this being:

• growth in technical parameters, e.g. increased weight/throughput.

• integration issues, e.g. hull upgrades, PAU interconnections.

• adoption of increasingly sophisticated equipment, e.g. process and

control.

It should be noted that a contributing factor to the delays in completion of

topsides integration is the layout of PAU on FPSO constrained by the

vessel beam. This might not be fully understood when sanction budgets

and schedules are being prepared.

Also a large proportion of recent FPSO projects that have been the

subject of litigation or contractual claims which might indicate there is a

problem with contracting strategies. Whereas, on recent conventional

platform projects litigation has not been evident.

5.0 STUDYFINDINGS



Business Analysis

A pattern emerges from the data provided, which is that few engineering,

fabrication and integration companies have completed two or more FPSO.

This is true for all functions (refer to work breakdown structure in

Appendix II for details), excluding hull engineering and construction where

a number of players dominate the market.

This pattern is reinforced by information in published literature on FPSO

(OPL Mobile Production Systems of the World) where experience on

FPSO has been limited to a small number of projects, sometimes years

apart. This suggests that, even for companies with experience on more

than one FPSO, it is unlikely the same core team would have been

responsible for the work. In short, the lessons learned and experience

gained from each project is often lost to the industry. Painful lessons in

terms of cost and schedule are repeated over and over. This situation

however, should improve as the number of FPSO projects grow.

One factor in FPSO development that is increasingly evident, and a

common problem on many projects, is the culture clash between the

shipbuilding and offshore industries. A second factor is the differences in

the specifications and standards between the two industries. Shipping

standards, where vessels are inspected annually and are subject to five-

year dry dock inspections, do not meet the requirements for an FPSO with

a long operational life with possible 20-25 years on location. Encouraging

the shipbuilding industry to adopt the required mind set for offshore work

has, in the past, not proved successful.

It is recognised that the practical solution is to leave it to the shipbuilder to

build the ship and to convert it to an FPSO at a specialised yard at the

next phase of the work. There may be exceptions to this rule, where a

small number of shipyards have built the hull and been responsible for

conversion, however, it is arguably not the most economic option.

The following table shows the hull engineering contractor, shipyard and

integration yard contract for respective FPSO hulls. More often than not

the hull is designed and built by the same company. This is supported by

the data and is valid for both new build and conversion FPSO.

5.0 STUDYFINDINGS



Note: Company names have not been listed however, letters A-Z, AA-XX,

AB - AIC represent individual companies, n = Newbuild, c = Conversion.

Hull

n/c FPSO EngineeringContractor

Shipyard IntegrationYard

Contractor

n 1 S T U

n 2 R R R

n 3 R R D

n 4 R R R

n 5 N N HH

c 6 Y Q I

c 7 Y Q DD

c 8 E E E

c 9 E E C

n 10 E E E

c 11 R R R

n 12 BB BB EE

n 13 M M G

n 14 G J AA

n 15 S, EE EE VV

c 16 BB BB C

n 17 O O C

The data also supports the view that integration works, and upgrades to

the hull, are generally executed outwith the shipyard. There are regional

differences to this argument, where if the hull is constructed in a European

shipyard, upgrades and topsides integration have been carried out in the

same yard. This variance may result from differences in execution

strategy or contractual arrangements, whereas in the Far East upgrades

to the hull and integration works are rarely carried out in the hull

fabricator’s shipyard.

The data suggests that for new build hulls cost and schedule targets are

not major problems. The concern begins to be raised with the delivered

product, which comes back to the conflict between standards for the

shipbuilding and offshore industries. Upgrading hulls to meet the stringent

offshore standards during the integration phase very often has major cost

and schedule implications. This cost and schedule impact is very often

5.0 STUDY FINDINGS



lost in the integration figures, which end up overstated, including a much

greater scope of work by the integration contractor.

The following table shows that for the FPSO in the study, in only one

instance has the same combination of engineers, fabricators and

integration contractors completed two FPSO topsides.

Topsides

FPSO EngineeringContractor

FabricationContractor(s)

IntegrationYard

Contractor1 S XX,PP U

2 A MM,NN,OO R

3 S OO, WW, XX D

4 R R R

5 K HH HH

6 Z KK I

7 DD ZZ, AB DD

8 X YY, KK, H E

9 G C C

10 A II E

11 P P R

12 S AC EE

13 G JJ G

14 G AA, JJ AA

15 S QQ, RR, TT VV

16 B C, LL C

17 B C, O, LL C

The above suggests, similar to the lessons learned and experience

gained by the main engineering contractors, that much valuable

knowledge is being lost across all three functions. This scenario may

have been inevitable with the small number of FPSO built to date,

however, with the fleet expected to double over the next five years and

with continued consolidation within the industry, a pattern of specialist

FPSO consortia, similar to the one exception, may emerge.

5.0 STUDYFINDINGS



For the seventeen FPSO in the study eight different companies

engineered the turrets. This range is evidence of the wide choice in turret

technology. Similar to topsides, where the combination of engineering,

fabrication, and integration contractors with experience of more than one

FPSO is small, the combination of turret engineering and integration

contractors is likewise small. From the FPSO in the study only once has

the same combination of engineers and integration contractors completed

more than one FPSO.

Turret

FPSO EngineeringContractor

FabricationContractor

IntegrationContractor

1 F AD U

2 R R R

3 W U D

4 R R R

5 F AD HH

6 CC - Q

7 FF AE Q

8 H E E

9 W E E

10 W E E

11 CC EE R

12 CC AE EE

13 CC AG, AH, AI M, G

14 FF AF J

15 F AD VV

16 L L C

17 W O C

Despite the above and from the cost and schedule data provided, turret

engineering, fabrication and integration works do not pose significant cost

and schedule problems. However, in certain cases of the data provided,

some of the costs for the turret integration work may be included in the

topsides integration costs.

The above explains in part the problems experienced with FPSO

developments, which includes cost and schedule overruns. However, the

data from this study confirms that the FPSO industry is a global business

and reinforces the idea, identified in a paper to the OTC by Farrell and

Watzke, that national, industry and company cultures must all be

5.0 STUDYFINDINGS



managed if a project is to be successful. Responses also support the

expansion of this idea by J Melvyn Green who, in a later paper to the

OTC, identified that the problems cultural issues present very often do not

become apparent until later in the project lifecycle, often during

construction, when generating solutions is more difficult. It is therefore

important that when planning an FPSO project adequate effort and

attention is given to identifying and managing the cultural influences and

interfaces.

Likewise the issues of language, location and communications on projects

involving global participation must all be managed. Selection of the most

appropriate location for the management teams and ensuring

communications do not breakdown, both contribute to a project’s success.

Also, comments on the returned questionnaire identify a requirement for

early definition of technical parameters and a clearly defined execution

and contracting strategy as prerequisites for success. This supports

earlier comment where growth in technical parameters has been

recognised as a key contributor to the cost increases and schedule

delays. Establishing realistic baselines – technical, cost and schedule,

from the outset will assist in delivering projects to plan.

Lessons learned and sharing of feedback within the industry has been

identified as a shortcoming. This includes a thorough review of technical,

commercial, schedule and business issues affecting the project. Not all

companies require projects to go through this process, separately from

the close-out reports. Others companies produce and publish thorough

reports for the benefit of all. In short, the lessons learned and experience

gained from each project is often lost to the industry. Painful experiences

in terms of cost and schedule are often unnecessarily repeated.

5.0 STUDYFINDINGS



Charts

The following charts and metrics have been developed using the data

provided by the study participants. Every effort has been made to validate

technical information and verify that in each case the cost and schedule

information compare like for like.

In accordance with the requests of participants, where it is believed

individual data points would allow identification of specific FPSO, these

have been hidden from the chart. The data, however, has been included

in calculating the trendline curves. All curves have been calculated using

the regression trendline of the “power” type, which has been found in the

past, to produce the best fit for this type of data. The curves are indicative

of range norms for a particular metric, however a degree of caution should

be exercised in the use of the data contained in this report.

Following each chart is a brief description of the performance

measurement metric. Two charts showing FPSO topside performance

with conventional topsides have been included for comparison purposes.

The charts are organised with FPSO facility information first cascading

down to element and function details, by topside, hull and turret.

5.0 STUDYFINDINGS



Chart No 1

Composite FPSO cost (hull, topsides and turret) per boe of recoverable reserves as declared bythe operator. The data points used to produce this chart have been hidden to preventidentification of particular developments. As would be expected, as the recoverable reservesincrease the cost per boe decreases.

Chart No 2

Actual versus planned FPSO sanction to start up duration in months, as declared by operators.This chart must be viewed with a degree of caution as individual operators’ definitions of sanctionvary. Compared with topsides duration charts (Chart Nos 15-17), it is apparent engineeringactivities have often commenced prior to receipt of formal sanction.

FPSO Sanction to Start Up Durations (Actual v Planned)

0

5

10

15

20

25

30

35

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000Topsides Design Throughput (boed)

Dur

atio

ns (M

onth

s)

Planned Duration Actual Duration Actual Trend Planned Trend

FPSO Cost ( Topsides Hull Turret)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

0 50 100 150 200 250 300 350 400 450Estimated Recoverable Reserves (mmboe)

Cos

t per

BO

E ($

)



Chart No 3

Composite FPSO cost (hull, topsides and turret) expressed as a cost per boed of designthroughput. (Chart contains hidden data points).

Chart No 4

Indicative cost allocation by WBS element for newbuild FPSO. Moorings, risers and offshoreinstallation are grouped together as insufficient detailed data was available to identify theseseparately.

FPSO Facility Costs Indicative Element Distribution

Hull30%

Turret10%

Topsides50%

Moorings, Risers, Offshore Instal'n etc.

10%

FPSO Cost (Topsides Hull Turret)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000


Cos

t per

BO

ED ($

)



Chart No 5

Indicative cost allocation by WBS element for recent newbuild FPSO facilities for which data wasreceived. The increased allocation to topsides on the recent FPSO might result from morecomplex process/integrated control systems and pioneering topsides facilities being installed, e.g.debutaniser column installed on a recent FPSO.

Chart No 6

This chart shows the relationship between design throughput and the number of beds perthousands of boed. For example, an FPSO with a throughput of 80,000 boed should require, in theorder of, 64 beds (80x0.80).

FPSO (Newbuild Hull) Facility Cost Indicative Element Distribution

Recent Facilities

Topsides60%

Hull22%

Turret10%

Moorings, Risers, Offshore Instal'n etc.

8%

Accommodation Capacity / Topsides Design Throughput

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00


Bed

s pe

r Tho

usan

d B

OED



Chart No 7

FPSO vessel deadweight expressed against FPSO storage capacity. The results verify the closecorrelation between deadweight and the storage capacity of a vessel.

Chart No 8

Topsides composite cost (engineering, materials, fabrication and integration) expressed as a costper boed of design throughput. As design throughput increases cost per boed decreases. (Chartcontains hidden data points).

FPSO Deadweight / Storage Capacity

0

50,000

100,000

150,000

200,000

250,000

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000Storage Capacity (bbl)

Dea

dwei

ght (

dwt)

Topsides Cost (Eng Mat Fab Int)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 Topsides Design Throughput (boed)

Cos

t per

BO

ED ($

)



Chart No 9

Comparison of FPSO and conventional topsides composite cost (engineering, materials,fabrication and integration) expressed as a cost per boed of design throughput. The trendline forboth have similar slope, however, as expected FPSO have much lower costs per boed.

Chart No 10

Actual versus planned composite topsides cost (engineering, materials, fabrication and integration)per design throughput (boed) expressed against topside design throughput. Actual costs areconsistently higher than planned. (Chart contains hidden data points).


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 240,000 Topsides Design Throughput (boed)

Cos

t per

BO

ED ($

)

FPSO Topsides Trend NS Conventional Platform Topsides Trend

Topsides Cost per BOED (Actual v Planned)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000


Cos

t per

BO

ED ($

)

Actual Cost per BOED Planned Cost per BOED Actual Cost Trend Planned Cost Trend



Chart No 11

Topsides composite cost (engineering, materials, fabrication and integration) expressed as a costper tonne of topsides net dry weight. Surprisingly, as topside weight increases cost per tonneincreases, however, this trend is consistent with data held for conventional platforms. (Chartcontains hidden data points).

Chart No 12

Actual versus planned composite topsides cost (engineering, materials, fabrication and integration)per topside weight expressed against topside weight. Actual costs are consistently higher thanplanned. (Chart contains hidden data points).


0

10,000

20,000

30,000

40,000

50,000

60,000

0 2,000 4,000 6,000 8,000 10,000 12,000Topsides Weight (te)

Tops

ides

Cos

t per

Ton

ne ($

)

Topsides Cost per Tonne(Actual v Planned)

0

10,000

20,000

30,000

40,000

50,000

60,000


Cos

t per

Ton

ne ($

)

Actual Cost per Tonne Planned Cost per Tonne Actual Cost Trend Planned Cost Trend



Chart No 13

Topside composite duration in months (engineering, materials, fabrication and integration) fromstart of engineering to the end of integration activities expressed against design throughput. Asexpected as throughput increases schedule duration increases (chart contains hidden data points).

Chart No 14

Topside composite duration in months (engineering, materials, fabrication and integration) fromstart of engineering to the end of integration activities expressed against topside weight. Again, astopsides weight increases schedule duration increases (chart contains hidden data points).

Topsides Actual Duration (Start of Engineering to End of Integration)

0

5

10

15

20

25

30

35

40

45

50


Act

ual D

urat

ion

(mon

ths)

Topsides Actual Duration (Start of Engineering - End of Integration)

0

5

10

15

20

25

30

35

40

45

50


Act

ual D

urat

ion

(mon

ths)



Chart No 15

Actual versus planned topside composite duration in months (engineering, materials, fabricationand integration) from start of engineering to the end of integration activities expressed againstdesign throughput. Refer also to Chart No 2 for additional comments. (chart contains hidden datapoints).

Chart No 16

Actual versus planned topside composite duration in months (engineering, materials, fabricationand integration) from start of engineering to the end of integration activities expressed againsttopside weight and design throughput. Surprisingly, the delay in planned and actual trendlinesappears almost parallel at circa five months delay in both charts.

Topsides Actual V Planned Durations (Start of Engineering - End of Integration)

0

5

10

15

20

25

30

35

40

45

50


Dur

atio

n (m

onth

s)

Actual Duration Planned Duration Actual Trend Planned Trend

Topsides Actual V Planned Durations (Start of Engineering - End of Integration)

0

5

10

15

20

25

30

35

40

45

50


Dur

atio

n (m

onth

s)

Actual Duration Planned Duration Actual Trend Planned Trend



Chart No 17

Topsides weight, in tonnes, expressed against topsides design throughput. As the designthroughput increases topside weight increases. This metric can be used as a measure of designefficiency.

Chart No 18

Comparison of FPSO and conventional topsides weight, in tonnes, expressed against topsidesdesign throughput. The trendline for both have rising boed per tonne, however, as expected FPSOhas a steeper slope and a much higher boed per tonne.

Topsides Design Throughput / Weight

0

5

10

15

20

25

30

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 220,000 240,000Topsides Design Throughput (boed)

BO

ED p

er T

opsi

des

Tonn

e

FPSO Topsides Trend NS Conventional Platform Topsides Trend

Topsides Design Throughput / Weight

0

5

10

15

20

25

30


BO

ED p

er T

opsi

des

Tonn

e



Chart No 19

Chart prepared with data supplied following issue of the interim report. The trend indicates a 15-20 percent increase in topsides weight with the percentage falling with increasing weight. Theresult is as would be expected with lower weight topsides suffering greater percentage increases.

Chart No 20

Indicative cost allocation by WBS function. The materials function appears higher than wouldinitially be expected. This is possibly due to certain fabrication costs for PAU being reported as amaterial cost item. Note owner/operator project management costs are not included.

FPSO Topsides Indicative Function Distribution

Engineering13%

Fabrication25%

Integration19%

Materials43%

Topsides Weight Percentage Increases

0%

5%

10%

15%

20%

25%

30%

35%

40%

6,000 7,000 8,000 9,000 10,000 11,000 12,000 Topsides Weight (te)

Perc

enta

ge In

crea

ses

Topsides Weight % Increase Topsides Weight % Increase Trend



Chart No 21

Topsides engineering cost expressed as a cost per tonne of topside net dry weight. Cost pertonne increases with increasing topsides weight, i.e. with complexity, etc. This is similar toconventional topsides trends (chart contains hidden data points).

Chart No 22

Topsides engineering manhours expressed as a function of topside weight. A wide distribution atthe heavier end of the weight scale may result in a skewed trend. The inherent inaccuracies withmanhour reporting must be borne in mind when reading this chart, however, increasing manhoursper tonne with increasing weight is similar to conventional topsides trends (chart contains hiddendata points).

Topsides Engineering Cost per Tonne

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000Topsides weight (te)

Cos

t per

tonn

e ($

)

Topsides Engineering Manhours per Tonne

0

20

40

60

80

100

120

140


Man

hour

s pe

r Ton

ne



Chart No 23

Topsides material cost expressed as a cost per tone. Surprisingly, the cost per tonne increaseswith increasing weight. An explanation for this fact could be the use of more exotic and expensivematerials in an effort to reduce weight on heavier topsides. This trend differs somewhat fromconventional topsides, which has a flatter curve (chart contains hidden data points).

Chart No 24

Topsides fabrication and integration costs expressed as a cost per tonne. Chart shows marginallyincreasing costs with increasing weight. The fabrication and integration functions are showntogether as, when viewed independently, give misleading results due to the blurred delineationbetween these activities (chart contains hidden data points).

Topsides Materials Cost per Tonne

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000Topsides Weight (te)

Cos

t per

Ton

ne ($

)

Topsides Fabrication and Integration Costs per Tonne

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000Topsides Weight (te)

Cos

t per

Ton

ne ($

)



Chart No 25

Topside fabrication and Integration manhours expressed jointly as a function of topsides weight.Interestingly, despite the wide scatter as topsides weight increases mahours per tonne trendincreases only incrementally. The inherent inaccuracies with manhour reporting must be borne inmind when reading this chart. (Chart contains hidden data points).

Chart No 26

Composite newbuild hull costs (engineering, materials and construction) expressed as a functionof hull storage capacity. As would be expected, the cost per barrel of storage decreases asstorage capacity increases. (Chart contains hidden data points).

Hull Newbuild Cost (Eng Mat Const)

0

50

100

150

200

250

300

350

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000Storage Capacity (bbl)

Cos

t per

Bbl

Sto

rage

($)

Topsides Fabrication & Integration Manhours per Tonne

0

50

100

150

200

250

300

350

400


Man

hour

s pe

r Ton

ne



Chart No 27

Composite newbuild hull costs (engineering, materials and construction) expressed as a functionof vessel deadweight. As would be expected, the cost per barrel of storage decreases as vesseldeadweight increases. (Chart contains hidden data points).

Chart No 28

Hull conversion costs expressed as a cost per barrel of storage capacity. The chart showsdecreasing costs per barrel as storage capacity increases. Three of the five conversions in thetarget FPSO are included in the above chart. The data points have been hidden as the vesselscan be readily identified.

Hull Conversion Cost per Storage Capacity

0

50

100

150

200

250

300

350

400

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000Storage Capacity (bbl)

Cos

t per

Bbl

Sto

rage

($)

Hull Newbuild Cost (Eng Mat Const)

0

500

1,000

1,500

2,000

2,500

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000Deadweight (dwt)

Cos

t per

Dea

dwei

ght T

onne

($)



Chart No 29

Hull composite duration in months (engineering, materials, construction) from start of engineeringto the end of construction activities expressed against deadweight tonnage. As expected as thedeadweight tonnage increases schedule duration increases.

Chart No 30

Actual versus planned hull composite duration (engineering, materials, and construction) from startof engineering to the end of construction activities expressed against deadweight tonnage. Thetrends indicate that hull actual durations are on, or about, planned dates.

Hull Newbuild Actual Duration (Start of Engineering to Completion of Build)

0

5

10

15

20

25

30

35

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000Deadweight (dwt)

Act

ual D

urat

ion

(mon

ths)

Hull Newbuild Actual V Planned Duration (Start of Engineering to Completion of Build)

0

5

10

15

20

25

30

35

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000Deadweight (dwt)

Dur

atio

n (m

onth

s)

Actual Duration Planned duration Actual Trend Planned Trend



Chart No 31

Turret cost in absolute terms plotted against topsides design throughput. Interestingly, a closecorrelation exists when expressed in this format despite the technical variation in turret types.(Chart contains hidden data points).

Chart No 32

Turret cost in absolute terms plotted against topside weight. Technical variation in turret typescontributes to the wide scatter of data point. Also, limited data on the heavier turrets may skew thetrend. However, it would be expected that turret costs would increase with increasing weight.(Chart contains hidden data points).

Turret (Internal) Cost v Turret Weight

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000Turret Weight (te)

Turr

et C

ost (

$000

's)

Turret (Internal) Cost v Design Throughput

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000


Turr

et C

ost (

$000

's)



Chart No 33

Technical analysis of turret weight expressed against riser capacity in absolute terms. The varietyof turret designs and options contribute to the lack of correlation on this and other measures,however despite the wide scatter of data points the trend is interesting.

Chart No 34

Technical analysis of turret weight expressed as a function of topsides design throughput. For agiven throughput the trend turret weight can be calculated, e.g. for a throughput of 130,000 boedturret should weigh in the order of 2600 te (130kboedx20).

Turret Weight V Risers

0

1,000

2,000

3,000

4,000

5,000

6,000

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28Number of Risers

Turr

et W

eigh

t (te

)

Turret Weight per Thousand BOED / Topsides Design Throughput

0

10

20

30

40

50

60


Turr

et W

eigh

t per

Tho

usan

d B

OED



Conclusions and Way Forward

Valuable cost and schedule metrics have been generated along with

technical statistics for the hull, topside and turret elements of FPSO.

Likewise, metrics for topsides engineering, materials, fabrication and

integration functions have been produced. Indicative allocations for FPSO

elements and topsides functions have also been generated with the data

provided. The small sample of data for moorings, risers and offshore

elements has precluded the production of metrics for these categories.

A greater sample of detailed data from vessels worldwide would allow

categorised analysis by technical parameters, producing more detailed

metrics for FPSO with specific characteristics. From the sample of FPSO

in this report such analysis has not been possible.

Interesting conclusions can be drawn with respect to ‘definitions’ within

the industry, e.g. sanction to start-up date. This benchmark is frequently

used within the industry but can be mis-leading or lead to confusion as

can be seen from the start of engineering to end of integration duration

charts. In most instances, engineering and procurement activities have

commenced well before sanction.

The difficulty in collecting data raises the question of whether the data is

readily available and what can be done to simplify that aspect of capital

expenditure. Improving the data capture process, to extract the valuable

lessons that can be learned and to recycle the information internally and

across the industry, would aid the understanding of FPSO performance.

FPSO activity globally remains high with a recent report by Norland

Consultants forecasting 53 shipshaped FPSO to be installed in the

offshore regions of the world by 2004. General sentiment in the industry

is that, if performance is genuinely to be improved, there is a need for a

more open approach towards sharing feedback and benchmarking

information. Establishing or identifying a forum where the industrycan confidently exchange information and establish joint initiativeswithout compromising individual projects or company confidentialityis a first step in achieving this objective. The PF, through this study,

has initiated A process to take FPSO benchmarking forward and facilitate

the drive for improved performance.

4.0 STUDYFINDINGS



APPENDICES



APPENDIX IParticipants Response to Study

Participants Response to Interim Report

FPSO STUDY ASSESSMENT

0

1

2

3

4

5Promotion of Study

Objectives of Study

Style of Study

Regions Covered

Data Acquisition

Level of Detail

Definition of Terms

Data Security

Communication

Duration

Effort versus Benefit

Overall

Maximum Rating Achieved Rating

FPSO REPORT ASSESSMENT

0

1

2

3

4

5Potential Value to Client

Layout & Presentation

Executive Summary

Introduction

OverviewStudy Findings

Charts

Conclusions

Overall

Maximum Rating Achieved Rating



APPENDIX II

Participating Companies

The following companies have contributed to the study:

Amerada Hess Enterprise Oil LASMO Texaco

Astano Enron Marathon Total Oil Marine

BHP Foster Wheeler MOBIL UIE Offshore

BRES J. Ray McDermott Navion Veba Oil & Gas UK

Chevron Keppel FELS Norsk Hydro WAPET

Conoco Kerr McGee Phillips Woodside

If required, the PF will make the necessary arrangements for participating companies to contact other

participants on points of common interest.


P5

APPENDIX III

T

r

a

ace Project Services Ltd Issue No. 1 of 6665/031/028

he above WBS represents the methodology used to categorise the elements and functions of work in the

ealisation of an FPSO development. This structure facilitates the collection of data, on a like for like basis,

nd subsequent analysis to develop useful metrics and norms.

Element

Function

HULL

Materials

Engineering

Facility

CAPEX

OFFSHORETOPSIDES

Engineering

Materials

Integration

Fabrication

Build/ Conversion

TURRET

FPSOInstallation

MOORING

Supply

RISERS

FLOATER - SHIP SHAPE

FPSO WORK BREAKDOWN STRUCTURE

Vessel Purchase

EPCEPC

Engineering

Materials

Integration

Fabrication

EPC

Supply

MooringInstallation

RiserInstallation

Hook-Up,Commission

IntegrationCarryover

TotalOffshoreIf Conversion WBS Functions EPC OptionWBS Legend



APPENDIX IV

Target FPSO

UK Sector Norwegian Sector Australian Sector Canadian Sector

Anasuria Asgard A Challis Venture Terra Nova

Bleo Holm Norne Cossack Pioneer

Captain Varg Griffin Venture

Glas Dowr Balder Jabiru Venture

Gryphon A Jotun Modec Venture (I) & (II)

North Sea Producer Buffalo

Mearsk Curlew Northern Endeavour

Petrojarl 4

Ramform Banff

Uisge Gorm

Schiehallion

Berge Hugin

Triton


APPENDIX V

Study Questionnaire and Definition of Terms

PERFORMANCE FORUM FPSO STUDY QUESTIONNAIRE


Section 1.0 Development

Development Name: Sanction Date (Month/Year):

Operator: Start Up Date (M Planned Actual (Month/Year):

Recoverable Reserves: Region:Oil Condensate Gas

mmbbl mmbbl bcfLocation:

GOR API º

Section 2.0 Facility

FPSO Vessel Name: Number of Beds:

Deadweight (dwt): Water Depth (metres):

Section 3.0 Elements

3.1 Topsides

Engineering Contractor: Engineering Location:

Fabrication:Item Description Contractor Location

Integration Yard Contractor: Integration Yard Location:

Design Capacity:Oil Condensate Gas Produced Water Gas Power

Throughput Throughput Throughput Water Injection Compression generationbpd bpd mmscfd bpd bpd mmscfd mw

LQ Part of Topsides: Topsides Weight (tonnes):Fabricated ItemsTotal

Option 1 - If details available complete inputs on engineering, materials, fabrication and integration.

Engineering: Planned Actual Materials: Planned ActualDuration Months Duration MonthsManhours No

Cost $000 Cost $000

Fabrication: Planned Actual Integration: Planned ActualDuration Months Duration MonthsManhours No Manhours No

Cost $000 Cost $000



Option 2 - If above details not available input total topsides duration and cost against EPC.

EPC: Planned ActualDuration MonthsCost $000

3.2 Hull


Shipyard: Shipyard Location:

Type: Construction:

Dimensions/Capacity:Length Breadth Depth Weight CrudeOverall Moulded Moulded Net Dry Storage

m m m te bbl

Systems:Main Thrusters Dynamic LQ Part of

Propulsion Positioning Hull

Previous Vessel Name: Purchase of Vessel/Hull ($000):

Option 1 - If details available complete inputs on engineering, build/conversion and transport.

Engineering: Planned Actual Build/Conversion: Planned ActualDuration Months Duration MonthsManhours No Manhours No

Cost $000 Cost $000

Transport Hull: Planned ActualDuration DaysCost $000

Option 2 - If above details not available input total hull duration and cost against EPC.


3.3 Turret


Fabrication Contractor: Fabrication Location:

Integration Yard Contractor: Integration Yard Location:

Turret Type: Fluid Transfer Method:

Dimensions:Height Diameter Weight Riser

Capacitym m te No



Option 1 - If details available complete inputs on engineering, materials, fabrication and integration.

Engineering: Planned Actual Materials: Planned ActualDuration Months Duration MonthsManhours No

Cost $000 Cost $000

Fabrication: Planned Actual Integration: Planned ActualDuration Months Duration MonthsManhours No Manhours No

Cost $000 Cost $000

Option 2 - If above details not available input total turret duration and cost against EPC.


3.4 Moorings:

Supplier: Supplier Location:

Anchor Type: Line Type:

Moorings: Supply Planned ActualAnchors Length Duration Months

No m Cost $000

3.5 Risers

Supplier: Supplier Location:

Description:Service Type No Length m

Supply Planned ActualDuration MonthsCost $000

3.6 Offshore

FPSO Installation Contractor: FPSO Hook UP Contractor:

Moorings Installation Contractor: Riser Installation Contractor:

Option 1 - If details available complete inputs on FPSO, moorings and riser installation.

FPSO Installation: Planned Actual Moorings Installation: Planned ActualDuration days Duration daysCost $000 Cost $000

Riser Installation: Planned ActualDuration daysCost $000



Option 2 - If above details not available input total installation duration and cost against Installation.

Complete Installation: Planned ActualDuration daysCost $000

Hook Up, Completion and Commissioning.

FPSO Hook Up: Planned Actual Integration Carryover: Planned ActualDuration days Duration daysManhours No Manhours No

Cost $000 Cost $000

Section 4.0 General

4.1 Unallocated Cost

General Cost Items Not Allocated To Section 3.0Description Cost ($000)

4.2 General Comments

Section 5.0 Data Source

Company:Name: Position:Telephone: Fax: e-mail:



Section 1.0 Development

Development Name: Operator designation for geographical area that contains recoverable hydrocarbon

reserves to be exploited (field name).

Sanction Date (Month/Year): Date of operator and partner agreement to commence works associated

with the development - Format mmm/YYYY.

Operator: Name of company, normally part of a consortium, which is responsible for exploitation of oil or

gas field.

Start Up Date (Month/Year):Planned: Original planned start up date, normally at project sanction - Format mmm/YYYY.

Actual: Actual start up date at completion of project - Format mmm/YYYY.

Recoverable Reserves: Amount of hydrocarbons expected to be recovered from field as estimated and

declared by operator.

Region: Political and geographical description of field location, e.g. UKCS, Norway, Australia Canada, etc.

Location: Geographical description of field location, e.g. for UKCS CNS, NNS or WOS, Australia NWS or

Timor Sea, etc.

Section 2.0 Facility

FPSO Vessel Name: Vessel designation when on station and in production.

Number of Beds: Number of permanent beds available in vessel living quarters.

Deadweight (dwt): Deadweight of completed FPSO vessel.

Water Depth (metres): Water depth, LAT, at position in field where FPSO vessel is moored.

Section 3.0 Elements

Engineering Contractor: Name of contractor responsible for detailed design and other related activities.

Engineering Location: Geographical location where majority of engineering activities performed, e.g.

London, Houston, etc.

Fabrication: Items fabricated remote from integration yard.

Item Description: Description of fabricated item, e.g. process module, compressor package, etc.

Contractor: Name of contractor responsible for fabrication and delivery of item.

Location: Geographical location of contractor's fabrication facility.

Integration Yard Contractor: Name of contractor responsible for installation of topsides on vessel, hook

up and completion of all FPSO systems prior to going offshore.

Integration Yard Location: Geographical location of integration yard, e.g. Stavanger, Singapore, etc.

Design Capacity: Maximum process design capacities for items listed.

LQ Part of Topsides: Was living quarters unit fabricated and installed as a topsides module?

Topside Weight (tonnes): Net dry installed weight of items designated as part of vessel topsides.



Engineering: The term engineering includes various phases such as preliminary engineering, detail

engineering and follow-on or post engineering. Activities within each phase consist of design,

procurement, QA/QC, weight control, etc.

Duration: Period from start of preliminary engineering to completion of detailed design and follow on

activities.

Manhours: Direct manhours allocated to specific disciplines within the engineering function.

Cost: Total cost relating to all engineering activities.

Planned: Original planned durations and budgets, normally at project sanction. (Typical)

Actual: Final data recorded at completion of project. (Typical)

Materials: Equipment and bulk materials necessary to construct and complete facility topsides.

Duration: Period from issue of first purchase order to last delivery of major item(s).

Cost: Total cost of supplying equipment and bulk materials, including freight and vendor support charges.

Fabrication: Performance of all operations necessary to produce fabricated items ready for installation as

part of an FPSO topsides, including delivery to integration yard.

Duration: Period from start of fabrication activities to delivery at integration yard.

Manhours: Labour direct manhours allocated to specific disciplines, e.g. structural, piping, electrical etc.

Cost: Total cost of fabrication activities including overheads and management, etc. Note: cost of

equipment and materials should be included in "Materials" section.

Integration: All activities necessary to install, integrate and complete topsides with hull to produce FPSO

vessel ready for offshore installation.

Duration: Period from start of integration activities at yard to vessel sailaway.


Cost: Total cost of integration activities, including overheads and management, etc. Note: cost of


EPC: All functions necessary to provide topsides on completed FPSO vessel ready for offshore

installation.

Duration: Period from start of preliminary engineering to vessel sailaway.

Cost: Total cost of topsides functions, i.e. engineering, materials, fabrication and integration with hull.

3.2 Hull




Shipyard: Name of shipyard company responsible for hull build/conversion.

Shipyard Location: Geographical location of shipyard, e.g. Korea, Singapore, etc.

Type: General description of FPSO hull build method.

Construction: General description of FPSO hull configuration e.g. single hull, double hull etc.

Dimensions/Capacity: Dimensions and design storage capacity.



Weight Net Dry (te): Net dry weight of hull structure including ship machinery.

Systems: Indication of optional systems available.

LQ Part of Hull: Was living quarters unit supplied as an integral part of hull and not as a separate topsides

module?

Previous Vessel Name: Name of vessel prior to conversion to FPSO.

Purchase of Vessel/Hull ($000): Purchase price of vessel/hull to be converted to FPSO.





activities.






Build/Conversion: All activities necessary to build FPSO hull or convert existing vessel/hull to FPSO hull.

Duration: Period from start of build/conversion activities at yard to completion of FPSO hull.

Manhours: Labour direct manhours allocated to specific disciplines, e.g. structural, piping, electrical, etc.

Cost: Total cost of build/conversion activities including materials, overheads and management.

Transport Hull: Transport of FPSO hull from build/conversion yard to integration yard.

Duration: Period from sailaway at build/conversion yard to arrival at integration yard.

Cost: Total cost of transport activities.

EPC: All functions necessary to provide topsides on completed FPSO vessel ready for offshore

installation.

Duration: Period from start of preliminary engineering to vessel sailaway.

Cost: Total cost of topsides functions engineering, materials, fabrication and integration with hull.

3.3 Turret




Fabrication Contractor: Name of contractor responsible for fabrication and delivery of item.

Fabrication Location: Geographical location of contractor's fabrication facility.

Integration Yard Contractor: Name of contractor responsible for installation of turret on vessel.

Integration Yard Location: Geographical location of integration yard, e.g. Stavanger, Singapore, etc.

Turret Type: Brief description of turret type, e.g. bottom mounted internal turret (BMIT).



Fluid Transfer Method: Brief description of fluid transfer method between vessel and risers, e.g. swivel or

dragchain.

Turret Weight: Net dry weight of turret structure and equipment.

Riser Capacity: Number of risers turret designed to accommodate.





activities.






Fabrication: Performance of all operations necessary to produce turret unit ready for installation on FPSO

topsides, including delivery to integration yard.

Duration: Period from start of fabrication activities to delivery at integration yard.


Cost: Total cost of fabrication activities including overheads and management, etc. Note: cost of


Integration: All activities necessary to install, integrate and complete turret unit within hull.

Duration: Period from start of integration activities at yard to completion of mating with hull.


Cost: Total cost of integration activities, including overheads and management, etc. Note: cost of


EPC: All functions necessary to provide completed turret on FPSO vessel hull.

Duration: Period from start of preliminary engineering to completion of mating with hull.

Cost: Total cost of turret functions, engineering, materials, fabrication and integration with hull.

3.4 Moorings

Supplier: Name of main supplier of anchors and mooring line system.

Supplier Location: Geographical location of supplier's main facility.

Anchor Type: Brief description of anchor type, e.g. suction pile, fluke, etc.

Line Type: Brief description of mooring line type, e.g. cable, chain, chain/wire, etc.

Anchors No.: Number of seabed anchor points in mooring system.

Anchor Length: Average length of individual mooring line.

Supply: All functions necessary to provide anchor/line mooring system.

Duration: Period from issue of purchase order to delivery of anchor/line mooring system.

Cost: Total cost of supply and delivery of anchor/line mooring system.



3.5 Risers

Supplier: Name of main supplier of riser system.

Supplier Location: Geographical location of supplier's main facility.

Service: Brief descriptions of each riser service including umbilicals, e.g. production, gas lift, control, etc.

Type: Brief description of each riser type, e.g. flexible pipe, umbilical, etc.

No.: Number of risers of specific service and type.

Length: Average length of individual riser against each service/type.

Supply: All functions necessary to provide riser system.

Duration: Period from issue of purchase order to delivery of riser system.

Cost: Total cost of supply and delivery of riser system.

3.6 Offshore

FPSO Installation Contractor: Name of marine contractor responsible for transporting FPSO vessel from

integration yard and installation activities at field.

FPSO Hook UP Contractor: Name of contractor responsible for completion of integration and

commissioning work following installation of FPSO vessel.

Moorings Installation Contractor: Name of marine contractor responsible for installation of mooring

system.

Riser Installation Contractor: Name of marine contractor responsible for installation of riser system.

FPSO Installation: Offshore installation of FPSO vessel in field including transportation from integration

yard.

Duration: Period from sailaway at integration yard to completion of installation activities in field.

Cost: All costs associated with transporting FPSO vessel from integration yard and installing in field.

Mooring Installation: Offshore installation of mooring system in field, prelay and pull-in, including

transportation from supply base.

Duration: Period from sailaway at supply base to completion of installation activities in field.

Cost: All costs associated with transporting mooring system from supply base and installing in field.

Riser Installation: Offshore installation of riser system in field, prelay and pull-in, including transportation

from supply base.

Duration: Period from sailaway at supply base to completion of installation activities in field.

Cost: All costs associated with transporting mooring system from supply base and installing in field.

Complete Installation: Offshore installation of FPSO vessel in field including transportation from

integration yard and installation of mooring system and risers.

Duration: Period from sailaway at integration yard to completion of installation activities in field.

Cost: All costs associated with transporting FPSO vessel from integration yard and installing in field,

including installation of mooring system and risers.



FPSO Hook Up: Completion of integration and commissioning work unable to be performed prior to FPSO

vessel installation.

Duration: Period from start of hook up work to end of completion/commissioning work, excluding

operations activities.


Cost: Total cost of hook up work including onshore support and logistics activities, includes also

integration carryover work.

Integration Carryover: Work that should have been performed at integration yard but actually carried out

at offshore location during hook up.

Duration: Period from start to end of carryover activities.


Cost: Identifiable cost of carryover work included in hook up total.

General Cost Items Not Allocated To Section 3.0: General cost items not allocated to elements in

section 3.0, e.g. owner project management, insurance, etc.

fpso benchmarking report 2000

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