Two SBM Offshore’s FPSOs slated for first oil in 2023 – Long read

Dutch FPSO operator SBM Offshore is working on several floating, production, storage and offloading (FPSO) projects and two of these vessels are expected to achieve the first oil this year.

While disclosing its record full-year 2022 directional underlying EBITDA of $1 billion, the revenue of $3.29 billion and the year-end backlog of $30.5 billion, SBM Offshore outlined on Thursday, 24 February 2023, that its project teams had continued to operate in “a challenging environment including ongoing continuous global inflationary pressures and pandemic related constraints.” 

Bruno Chabas, CEO of SBM Offshore, commented: “2022 has been a challenging year for SBM Offshore, yet we were able to achieve good performance. We achieved record-level underlying EBITDA, driven by our strong backlog which also grew to a year-end record level following the award of FPSO One Guayana.”

The company explains that construction activities continue to experience impacts, particularly with the expected temporary increase of positive cases in the country, despite the recent relaxation of COVID-19 measures in China, which should improve the mobility of personnel and material. Project teams are working “closely with client teams and contractors in seeking to mitigate the impacts on project execution,” highlighted the firm.

“Undertaking the construction of six FPSOs in the current climate is challenging. Our yards in China have been disrupted by COVID-19 lockdowns and the war in Ukraine has contributed to logistical problems and inflationary pressure. This has impacted construction and operations, resulting in increased costs. The extent to which these impacts can be mitigated at the project level varies, however at the portfolio level, margins remain robust,” added Chabas.

The FPSO operator also provided an update on individual project schedules, explaining that the integration and commissioning activities for the FPSO Sepetiba, which is destined for Petrobras’ Mero field in the Santos Basin offshore Brazil, are progressing and the project targets first oil in 2023.

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

Currently, the FPSO Guanabara and the FPSO Pioneiro de Libra are used on the Mero field, which is Brazil’s third largest field by volume of oil in place, behind only Tupi and Búzios, also located in the pre-salt Santos Basin.

Following the completion of integration and onshore commissioning activities, the FPSO Prosperity has safely departed from Singapore, according to SMB Offshore. The first oil is also anticipated in 2023. This FPSO will be chartered to the consortium of ExxonMobil, CNOOC, and Hess for operations offshore Guyana.

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

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

Regarding the FPSO Almirante Tamandaré, SMB Offshore underlines that the Fast4Ward MPF hull is nearing completion at the yard while topsides fabrication is progressing well. The first oil is scheduled for 2024, as planned.

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

Furthermore, the FPSO Alexandre de Gusmão, which is expected to work for Petrobras on the Mero field in the Santos Basin offshore Brazil, will be the fourth definitive system to be installed in the Mero field. Based on the firm’s statement, the topsides fabrication and Fast4Ward MPF hull for this FPSO are progressing with the first oil slated in 2025.

In October 2022, SBM Offshore confirmed the construction of topside modules for the FPSO One Guyana – the firm’s largest FPSO so far – started in September 2022. Two steel strike ceremonies were held in both Keppel FELS and Dyna-Mac yards to mark this milestone. 

The firm underlines that the topsides fabrication for this FPSO is progressing as planned while the first oil is expected at the end of 2025. This FPSO will be used for the fourth development within the Stabroek block, called the Yellowtail development project, which comprises six drill centres and up to 26 production and 25 injection wells. ExxonMobil sanctioned the project in April 2022 and followed it up with a contract confirmation with SBM for the supply of the FPSO for the project.

Located some 200 km offshore Guyana, the deepwater wells will be tied back to the FPSO One Guyana for processing. The FPSO is expected to perform produced water treatment functions as well as oil separation and gas injection.

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

Under the Fast4Ward programme, seven MPF hulls have been ordered to date, says SMB Offshore, while adding that six have been allocated to projects and the exclusivity of the seventh MPF hull has been granted to ExxonMobil Guyana.

2022 brings good results despite challenges

SMB Offshore’s fleet uptime in 2022 was 91.1 per cent, reflecting the shutdown of the FPSO Cidade de Anchieta. However, excluding this unit, the fleet’s underlying performance was above 97 per cent. In the last quarter of 2022, the company agreed on a contract extension related to the lease and operation of FPSO Saxi Batuque up to June 2024.

“Operating performance remained healthy. We achieved delivery and flawless startup of FPSO Liza Unity at the beginning of the year, surpassing industry benchmarks. The overall performance of the fleet has been good from an efficiency, uptime, and emissions standpoint, capitalizing on our digital know-how. We safely restarted the FPSO Cidade de Anchieta at full production in December,” elaborated Chabas.

Pursuing new energies

As one of the energy transition players, SBM Offshore has invested in the development of technologies to increase its footprint in new energies, especially in floating offshore wind (FOW) with the Provence Grand Large (PGL) wind farm commercial pilot project progressing well. In 4Q 2022, the transition pieces linking the floater to the turbine mast were installed. The three turbines supported by the firm’s tension leg technology, projected to produce 25 MW, are scheduled for commissioning by the end of 2023.

The project, jointly owned by EDF Renewables and Maple Power, will account for approximately 10 per cent of the worldwide installed floating wind electricity generation capacity in 2023. Capitalising on this experience, SMB Offshore has identified improvements for future designs, which are captured by the Float4Wind concept, the second generation of the firm’s floating wind technology.

As the firm believes that the FOW market will take time to materialise, it is co-developing FOW projects and securing seabed rights and relevant permits, together with partners, to better understand the market and accelerate new technologies deployment.

In parallel, leveraging its experience and expertise in floating energy solutions, SBM Offshore is investing in the development of other new technologies to facilitate the energy transition. In the near term, the company is seeking to provide offloading terminal solutions for CO2 and to adapt existing terminal solutions for future fluids such as ammonia.

“Our New Energies business is delivering tangible results: construction of the three floating foundations for the 25 MW Provence Grand Large offshore floating wind project is nearing completion. The project is scheduled for commissioning before the end of 2023 and we are already leveraging learnings as we conceptualise future designs,” emphasised Chabas.

Net-zero targets 

In support of its 2050 net-zero ambition, SBM Offshore has created new intermediate targets, thus, the firm is targetting net-zero on scope 1 and 2 emissions and a 50 per cent reduction of GHG intensity on scope 3 as well as zero routine flaring by 2030. The company has been developing an emissionZERO programme since 2020 to reduce emissions. In 2022, SBM Offshore developed an all-electric drive FPSO, which it sees as “a key contribution” to developing a near-zero emission FPSO, planned to be market-ready by 2025.

“We are driving progress towards our 2030 targets of reducing emissions intensity by 50 per cent per barrel of oil produced and developing innovative lower-carbon, new energy and digital technologies. Industry pacesetting and ‘doing things right’ at all levels of the organization is what SBM Offshore does and will continue to do. It is our contribution to the energy transition,” concluded Chabas.

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