Copyright 2007, Offshore Technology Conference This paper was prepared for presentation at the 2007 Offshore Technology Conference held in Houston, Texas, U.S.A., 30 April–3 May 2007. This paper was selected for presentation by an OTC Program Committee following review of information contained in an abstract submitted by the author(s). Contents of the paper, as presented, have not been reviewed by the Offshore Technology Conference and are subject to correction by the author(s). The material, as presented, does not necessarily reflect any position of the Offshore Technology Conference, its officers, or members. Papers presented at OTC are subject to publication review by Sponsor Society Committees of the Offshore Technology Conference. Electronic reproduction, distribution, or storage of any part of this paper for commercial purposes without the written consent of the Offshore Technology Conference is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of where and by whom the paper was presented. Write Librarian, OTC, P.O. Box 833836, Richardson, TX 75083-3836, U.S.A., fax 01-972-952-9435. Abstract Floating Production, Storage and Offloading (FPSO) facilities have developed over the last 40 years to become an increasingly popular solution worldwide for offshore field development. To date no FPSO has been deployed within the US Gulf of Mexico (GOM) where the dominant production facilities have been fixed structures and floating production system based on Spar, TLP, and Semi-submersible platforms. Higher oil prices and significant ultra-deepwater prospects extending farther beyond established pipeline infrastructure, make FPSOs an increasingly viable option. Operators, Contractors and new entrepreneurs worldwide want to capture that market and are committing to the FPSO solution by placing orders for speculative builds. Many of these build contracts are signed without a specific field destination or production contract in hand and are contracted with a “generic” FPSO specification. The design specification of a generic FPSO presents many challenges. Selecting a workable environmental design envelope and the type of regulatory environment the vessel should satisfy are some of the early decisions that will determine the success of the investment. This paper discusses the challenges of developing a speculative build in view of regulatory requirements worldwide and in the US GOM. FPSO background and practices Floating Production, Storage and Offloading units (FPSO) have developed over the last 40 years to become an increasingly popular solution for development of new offshore fields. They have practical advantages compared to more traditional types of offshore installations. In addition to being one of the very few feasible technical solutions for the deep and ultra-deep water remote locations, they represent a comparatively low capital expenditure. They can to a large extent, be built based on conventional shipbuilding technology and finished and commissioned at the yard avoiding costly offshore work. FPSO units can take heavy payloads as well as

providing storage and offloading facilities. Further advantages include easy offshore installation, decommissioning and re-use. The first FPSO was taken into use offshore Spain in 1977. Over the next ten years the FPSO established itself as a viable solution for offshore production and from a modest 12 units in 1985 the total fleet of offshore ship-shaped units (FPSO/FSO) increased to almost 200 units some 20 years later1. At the end of 2006 about 60% of the fleet is comprised of units that can produce, store and offload (FPSO) with the remainder having storage and offloading capacity only (FSO). Almost two-thirds of today's FPSO fleet is made up of tankers converted for production and storage service as shown in Table 1. More significant to the offshore industry is the remarkable expansion of the FPSO fleet in the last ten years as shown by the solid line in Figure 1. The expansion is characterized by two distinct cycles. The first in the mid to late 1990’s when new contracting strategies resulted in floating production vessels being introduced in large scale to the North Sea. The second cycle started in the early 2000’s following large deepwater discoveries in areas generally remote from existing pipeline infrastructure and suitable for wet tree development. Also shown in that figure is the annual average world crude price. While the first cycle took place against a more volatile crude price environment the second cycle is benefiting from the new crude price threshold of $50 plus and the rapid economic growth in some large economies. Based on the number of FPSO units on order and forecast this second cycle is expected to be longer and stronger than the previous one. This scenario has attracted new entrepreneurs to the floating production market financed by private investors and the financial market. Many of these investments however are made on a speculative basis without a production contract in hand, i.e., a “generic” FPSO solution. The challenges of a FPSO speculative build Recent higher oil prices have added to the pressure to shorten the development cycle of offshore oil and gas fields. Until recently design and build cycles for newbuild FPSO projects were in the range of 3-4 years with some 18 months for design and specification and 24 months for construction and installation. Today the project cycle has been cut down to under two years using “design one, build multiple” strategies2. This schedule compression can be achieved for multiple large developments that have similar geologic, geographic, economic, and contractual elements. While speculative builds

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Compliance for FPSO—Gulf of Mexico and Speculative Builds Craig Colby, Sergio Matos, and Santhosh Kumar Mony, DNV Energy

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are by nature very different and cannot benefit from these elements a key success factor for investors is to bring these vessels to market in the shortest time possible. In present market conditions this is a major challenge. The prospective owner must assess the market opportunities and develop a generic specification that is flexible enough to accommodate project specific requirements (when an application is found) but with enough definition to allow efficient design and build execution. The following paragraphs provide a discussion of the considerations to be made when considering a speculative newbuild FPSO vessel. Early decisions on design specification

The design specification of a generic FPSO presents many challenges. Selecting a workable environmental design envelope can be a difficult task if the vessel is intended to operate in different offshore environments. The environmental conditions for a target operation area, e.g., Gulf of Guinea, will be a determining factor on the choice of mooring system, hull shape, and riser configuration and will impact on the expected production uptime. Even within a given target area the environmental conditions can change when a specific location is selected. For example, the analysis of hurricane and loop current data suggests that extreme environmental conditions in the western Gulf of Mexico are less severe than those to be found in central and eastern Gulf3.

If the FPSO is intended to operate in hurricane or typhoon prone areas, e.g., Gulf of Mexico and some areas in SE Asia, the vessel will most likely be specified with a disconnectable turret either internal or external. Depending on the local environment during production and offloading uptime targets may additionally require thruster assistance. The decision to specify a permanent mooring or disconnectable turret with thruster-assist will significantly affect the capital investment.

Environmental conditions will determine the FPSO optimal hull shape, a wave-piercing bow or a flat-bottom barge. Wave-piercing bows are normally associated with a turret mooring system and suitable for harsher environment locations. The vessel must be designed for larger bow slamming, bow impact pressures and possible green water loads. Barge-like FPSOs will normally be spread-moored and are more efficient for locations characterized by long-crested seas and where extreme design conditions are marginally higher than the operating design condition. In that case the combination of beam or quartering seas with frequent loading and unloading of cargo tanks will introduce fatigue loading that will govern the design of the side shell, side longitudinals located at intermediate drafts and other hull internal structure4. Both hull shapes can be designed to operate in a range of environmental conditions but the floater performance can result sub-optimal.

In addition to fatigue and ultimate strength considerations FPSOs intended to operate in tropical areas will be subject to a significantly more aggressive corrosion environment due to higher ambient temperatures and humidity. The corrosion rate of steel will double when temperature increases from 20°C to 30°C5. Uncontrolled corrosion can lead to structural failure and loss of containment with unacceptable consequences. A corrosion control strategy must be selected at the early stages

considering a combination of suitable design corrosion margins, type and expected breakdown of coating systems and type and expected depletion rate of anodes.

Generally production contracts require the vessel to be on location for the life of the field as disconnection from live wells for a prolonged period of time can present flow assurance problems in addition to the loss of revenue. Provision for in-place inspections in lieu of regular five-year dry-docking cycle must be decided in the design phase to allow proper access for inspection without significant economic consequences.

A key issue in the conceptual design of a FPSO is the impact of the hydrocarbon process plant and its major components on vessel motions, response and stability due to their mass, position of the centre of gravity and windage area. Other early decisions will be necessary regarding the demand on systems and utilities by the future hydrocarbon plant and how much integration is possible between those serving the vessel and the plant. A speculative FPSO specification may add some additional system/utility capacity and a plug-and-play approach to integrate needs e.g., for power, sea water, compressed air and other facilities. However issues like gas handling and the possiblility to flare or reinject produced gas will impact the vessel arrangement and facilities. Another aspect for systems and utilities serving the hydrocarbon plant is that they must comply with the specific technical requirements of National regulations. Experience shows these requirements can cause substantial re-work and major negative impact on production schedules if they are not identified at an early stage. Finally, while the riser system is not normally part of the supply scope the speculative FPSO specification must address the interface and impact of different riser systems.

The speculative FPSO development process must be flexible to accommodate as many options as possible but having enough definition to allow specification and design, initial cost estimates and possibly procurement and fabrication. One approach is to define core generic elements allowing for customization or upgrading in other areas when the final location is known. This approach is illustrated in Figure 2. Construction Challenges

The growth in the FPSO market is constrained in the short term by the building capacity. Slots at traditional shipyards are booked up to three years in advance. With most booked for the foreseeable future speculative FPSOs will have to look elsewhere to find a slot. Yards and fabrication sites in China, Middle East and elsewhere are the next option. Most of these yards are capable of installing and/or expanding capacity to build or outfit an FPSO. However they may fall short of the engineering capacity or experience. This will require developing engineering construction documentation beyond what is normally done for the more experienced yards, and increased integration, technical support and quality supervision of the production line of the yards.

Speculative builds may not have the freedom to select design, fabrication and procurement suppliers as local content requirements may force work to be done in-country or by local companies. Selecting local partners and the implications and limitations in the execution of the project resulting from the

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same should be well understood from early enough to cater for a smooth execution.

Planning for Regulatory Compliance in the Global Market One key decision in the planning phase for a generic FPSO is the type of regulatory environment the vessel should satisfy, i.e., country-specific or international. States have full sovereignty with respect to regulating activities on their continental shelves and, similar to other types of production units, FPSOs are governed by National regulations. In addition, FPSOs intended for multi-country operation must comply with international safety regulations for transit in international waters. In that case FPSOs must be registered with a Flag State and have a valid Classification certificate. While some National regulations incorporate the mostly prescriptive international conventions, e.g., the IMO MODU Code and require FPSOs to be registered with a Flag State and classed, they may also contain risk-based performance criteria. This will require risk analyses work that is supposed to be repeated and refined at all project stages. This means that new requirements may be introduced at later stages in the project with a potential impact on cost and schedule depending on the contracting strategy selected. An early decision on the type of regulatory environment will help determine the extent of risk analysis to be undertaken and documented, and the opportunity cost to implement risk-based solutions. National authorities tend to specify technical requirements to hydrocarbon plants leaving the FPSO hull and machinery as "marine" and covered by class/flag standards. Utility and auxiliary systems, e.g., compressed air, instrument air, fresh water, sea water cooling, etc. are however used for marine and process systems and subject to a double set of requirements. While establishing a set of consistent and workable standards is a challenge for offshore projects that is augmented when the project is generic. In most cases the project will be faced with the application of National standards that are not well known or rarely used outside the country of origin or have to reconcile sometimes conflicting technical requirements. The following paragraphs offer a brief review of some National regulations and how they would impact the specification and execution of a speculative newbuild. FPSOs are commonly used in the North Sea. The FPSO activity in the UKCS is regulated by the HSE. The regulations are performance-based and require a Safety Case with extensive supporting risk analysis work. The Operator has the overall responsibility for safety and is responsible for establishing a written verification scheme for the safety critical elements identified in the Safety Case. An independent competent person (ICP) shall execute verification according to this scheme. Classification may be used to document partial compliance with regulations and Class Societies also normally act as ICP for FPSOs. FPSO operations in Norway are regulated by the Norwegian Petroleum Safety Authority (PSA). The regulations are essentially performance-based with the Operator having the overall responsibility for safety objectives and for documenting compliance. The operator must develop a

comprehensive verification program. Classification can be used as part of the verification program to document partial compliance with the regulations. Until the Petroleum law is regulated in ANGOLA the offshore E&P activities are governed by Production Sharing Agreements (PSAs) where SONANGOL is a stakeholder. There is no requirement for flagging or classing FPSO units but Operators have used “best practice” and used class and international conventions as basis. The offshore regulations in NIGERIA are prescriptive and include aspects of safety, environment and fiscal revenues. These regulations have not been updated in many years and more recently the Department of Petroleum Resources (DPR) has asked for risk explosion studies. FPSOs must register with Nigerian administration (Flag) and have a valid classification certificate documenting satisfactory structural integrity, and follow mandatory surveys. The requirements are enforced by the DPR as lead agency although the Nigerian Maritime Authority (NMA) and Navy have some jurisdiction on FPSO projects. In China the rules and regulations are established by China Offshore Oil Operation Safety Office (COOOSO). COOOSO reports to the State Administration of Work Safety (SAWS) that in turn reports to the State Council of China. COOOSO acknowledges some international rules and standards, and for FPSOs Rules of major classification societies are accepted. The Operator is responsible for obtaining the Certificate of Compliance / Fitness from a certification agency authorised by COOOSO. The Australian regulatory regime has many elements of the US regime. The Provinces in Canada have a large degree of independence. There are two relevant regional jurisdictions on the east coast of Canada, namely, the Canada Newfoundland Offshore Petroleum Board (CNOPB) and the Canada Nova Scotia Offshore Petroleum Board (CNSOPB), each having their own regulations and slightly differing practices. Production units must comply with the Drilling, Installation and Production Regulations of the respective Boards, and be issued with a Certificate of Fitness from an approved Certifying Authority (e.g. DNV). In addition all floating units must comply with Transport Canada Marine Safety Regulations. US regulatory requirements are discussed in the following paragraphs. US GOM Regulatory Compliance for FPSOs Despite the prevalence of FPSOs world wide, no ship-shaped FPSO have yet been deployed within the US Gulf of Mexico (GOM). There have been many factors such as an established transport pipeline network, US restrictions on flaring, and preference for dry-tree wells contributing to a bias towards other field production solutions. With the new ultra-deepwater developments extending farther from existing infrastructure and a shifting preference towards shorter and less capital risky field development cycles, FPSO are being looked at as an increasingly viable option for the GOM. Also with the recent GOM hurricane experiences over the past few years, detachable self-propelled FPSOs can bring additional risk mitigation by the ability to avoid a storm. These factors are bringing FPSOs closer to reality in the GOM and it is very possible to see some FPSO projects deployed soon. Many are

4 OTC 18649

now looking at FPSO concepts both for specific projects and on a speculation basis for the GOM. This brings up the issue of how the regulatory compliance would be applied in US waters and how it differs from other regions in the world.

With the risk adverse nature of the GOM oil & gas industry, the lack of established regulatory track record for a US GOM FPSO solution has been one concern for project development decisions. MMS and USCG have been actively working with industry over the past decade to address these concerns. A quick summary of some major activities by both industry and the US Government that have helped establish a basis for a regulatory framework where FPSO can be deployed in the GOM:

- FPSO Risk Assessment JIP6

- Development of an API Recommended Practice 2FPS applicable for FPSO use in Gulf of Mexico7

- Numerous Deepstar studies supporting FPSOs8

- A comparative risk analysis of FPSO’s with other deepwater production systems in GOM9

- FPSO Environmental Impact Study (EIS) and Record of Decision10

- Numerous workshops and technical papers initiated by both MMS and USCG outlining expectations for FPSOs11, 12 What follows now is a summary of regulatory compliance considerations for a speculative FPSO concept for the GOM. In the US, both USCG and MMS share regulatory oversight responsibilities for OCS floating production facilities and thus both agency requirements must be considered. USCG jurisdiction is specified in Title 33 of the US Code of Federal Regulations (CFR) and MMS in Title 30. A Memorandum of Understanding (MOU) outlining the shared responsibilities and designates where one agency will take the lead in particular areas13. For FPSOs, USCG is designated as the lead agency for the vessel and MMS is the lead for the production related systems with some shared responsibility for specific items. Different countries take different statutory regimes having a prescriptive vs. risk-based performance approach. The US has been normally prescriptive in nature towards compliance with CFR specified requirements. Both MMS and USCG have or are in the process of updated portions of CFRs to bring in new requirements and establish a framework for FPSOs. As these have limited application and many aspects of ultra-deep FPSO for GOM are evolving, there may be aspects of project not covered in the CFRs. Also for consideration, MMS has publicly stated in various forums that they “will need to be assured that the use of [FPSO] technology does not increase the general risk to the environment over other alternatives”12. Many of the previously cited risk assessments6, 9 were efforts by industry to demonstrate this in a general basis for FPSOs on the GOM. The issue of risk assessments is raised here as there may be a potential to demonstrate acceptable risk for areas that may fall outside the specifications established by the MMS and USCG. It is encouraged that early dialog with both agencies to clarify any such areas which fall outside specific CFR and policy requirements.

USCG FPSO Requirements As stated earlier, the USCG is the lead agency responsible for most areas of the vessel outside the production area and production safety systems for shipped-shaped FPSOs. These include, for example, structural integrity, stability, fire protection, life saving, and offloading systems. A few areas are specified as joint responsibility with the MMS such as the mooring, turret, and hull-turret interface. The requirements of USCG for an FPSO are specified in Title 33 CFR Subchapter N; more specifically 33 CFR 143.120 which is very brief in nature. A more comprehensive proposed rulemaking by USCG for floating OCS facilities including FPSOs was published in 199914 specifying requirements for design and equipment, plan approval, inspection and certification, etc.. In the proposed rule are cross references to CFR design requirements for MODUs and tank vessels in addition to industry recommended practices such as API 2FPS. Due to the backlog of legislative activity for homeland security post 9/11/2001, this proposed rule is still pending and could be soon published as either a final rule or interim final rule. In the meantime, one aspect of the proposed rule the USCG has made clear is the applicability of the requirements in OPA-90 for a GOM FPSO given by the tank vessel hull construction standards found in 33 CFR 157.10d11.

For various reasons, many of possible FPSOs being consider for the GOM are planning on maintaining a non-US Flag. One is use of a foreign flag can facilitate a simpler path in the USCG approval process under USCG Merchant Vessel Inspection (MVI) policy letter 13-9215. This MVI has similar to the language to that contained in the proposed Subchapter N rule and for what USCG uses for foreign flagged MODUs operating in the OCS. The compliance primarily must be to one of the following options: - US Flag requirements - Foreign Flag requirements found equivalent by USCG to US Flag requirements - IMO MODU Code requirements - Having both a valid SOLAS Cargo Ship Safety Construction Certificate and SOLAS Cargo Ship Safety Equipment Certificate plus meet US Flag requirements for items not addressed in these certificates. The last option, SOLAS, appears to be the most preferred option as SOLAS compliance is an area well understood by FPSO operators and already in place for candidate vessels. Apart from the MVI requirements, other areas for USCG consideration are: - Offloading methods and specifications. - Any special crew manning and certification of personnel requirements. - OCS Facility Security Requirements covered in 33 CFR Part 105. Where do Classification Societies such as DNV fit into such a schemes? First, classification rules for FPSOs have a long established history of application and a familiar to most design and operating companies. API when creating a standard applicable for FPSO in API 2FPS chose to incorporate by reference Recognized Classification Society (RCS) Rules for

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many parts instead of trying to recreate them. Classifications Societies have long worked closely with established flag states in the application of international standards towards FPSOs. Finally, Classification Societies such as DNV have a track record of working with USCG assisting Foreign Flagged MODUs with the documentation requirements in order to obtain USCG Letter of Compliance to cooperate in the US OCS. With such experience, the Classification Societies such as DNV can facilitate documenting compliance in a streamlined manner. MMS FPSO Requirements The applicable MMS regulations for OCS production facitlies are specified in 30 CFR 250 and are covered by: - Subpart B: Field Development Plans and Information - Subpart H: Oil & Gas Production Safety Systems - Subpart I: Platform and Structure Requirements Requirements for field development are specified in Subpart B, Plans and Information which cover the permitting including the approval of the Exploration Plans (EP), Deepwater Operations Plan (DWOP) and Development Operations Coordination Plans (DOCD). This is handled by the lease holder for each specific field but some key information to be submitted is particular to the chosen facility and accordingly such information must be considered when planning a speculative FPSO project. These requirements were recently updated in 200516. Many of the submitted information pertain towards the potential environmental impact of a development solution. Information that must be supplied and evaluated related towards air emissions and overboard discharges. For OCS facilities, MMS must ensure compliance with the National Environmental Policy Act (NEPA) which includes new permitting for new OCS discharge sources and may require mitigation measures for high volume seawater cooling systems that can be applicable for an FPSO. The NEPA requirements are being phased in for new OCS Oil and Gas facilities and can affect concepts new being considered. Also for consideration is if the FPSO concept falls outside the case considered in the EIS12. If so, additional work may be required to update the EIS. Finally, this CFR part covers a process for proposing and vetting with the MMS through the DWOP process any new technology that could be employed or any alternate compliance measures that are proposed. FPSO topsides production safety requirements are listed in 33 CFR Subpart H (250.800) incorporating by reference many API standards such as: - API RP 14C for Safety Analysis for Production Safety Systems. - API RP 14E, Design and Installation of Offshore Production Platform Safety Systems - API RP 500 or 505 for Hazardous Area Classification - API 14F or API 14FZ for Design and Installation of Electrical Systems - ASME code for Pressure Vessels and Pressure Relief systems. Designs for the mechanical and electrical systems much be certified by a registered professional engineer to the applicable standards in this subpart.

For speculative FPSOs, the additions of API RP 14FZ and API RP 505 to the CFRs were an improvement that was made possible after the introduction of Article 505 in the 1999 National Electrical Code. These documents specify hazardous locations as classed by designations Zone 0, Zone 1, and Zone 2 instead of the traditional US Division 1 and Division 2 designations used in the API RP 500. The zone approach is closer aligned with definitions used by the IEC and Classification Societies for floating facilities and should reduce the modifications needed to existing FPSO design practices as well as produce more cost effective and reliable installations. Hazardous equipment may require an ANSI AEx designation that are “normalized” versions of the IEC 60079 series standards and can have some extra requirements that exceed IEC specifications. One area of focus for MMS will be the interface between the marine systems and production systems so any impact of marine system safety and reliability that effect production or subsea ESD systems must be documented as adequate. For FPSO conversions, documentation of preexisting equipment safety standards and obtaining MMS approval of alternate standards, if they are found as adequate, should be considered.

Requirements for the vessel are identified in Subpart I, Platform and Structure Requirements and were updated in 200517. For this subpart, MMS employs a third-party Certified Verification Agent (CVA) which acts on its behalf to verify compliance with applicable requirements. The recent update formalized the MMS’s and its CVA’s role for ship-shaped floating facilities limited to turret and turret-and-hull interfaces, foundation and anchoring systems, and mooring systems. Additional design and certification requirements were added for all floating facilities including FPSOs for drilling, production, and pipeline risers, and riser tensioning systems. Finally, this updated incorporated by reference many industry standards applicable for FPSOs such as API RP 2FPS referenced earlier and API RP 14J, Recommended Practice for Design and Hazards Analysis for Offshore Production18. Conclusion Over the last decades the FPSO has established itself as a preferred solution for deepwater production both as early production and as a permanent production system due to its cost, schedule and its ability for potential re-deployment to produce other fields. The surge in deepwater discoveries in recent years has prompted many operators, contractors and investors to consider building speculative FPSO units for worldwide use. Deepwater discoveries in areas beyond existing infrastructure make the FPSO an increasingly viable option also for the GOM. The MMS and USCG have been actively working with industry over the past decade on the FPSO issue. Both agencies have or are in the process of updating portions of Code of Federal Regulations to bring in specific requirements and establish a basis for a regulatory framework where the FPSO can be deployed in the GOM.

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The more conservative nature of the GOM oil & gas industry and the lack of an established regulatory track record for a US GOM FPSO solution are concerns for project development decisions. For that reason investors will require some flexibility in the speculative FPSO. The speculative FPSO must be targeted at an operation area(s) or prospect(s) with due consideration of the regulatory regime and requirements. The specification should be prepared in a format that is flexible enough to accommodate future project needs but having enough definition to allow design and build. A systematic approach early in the investment phase to address the technbcial and regulatory elements mentioned in this paper will help in achieving a cost effective and smooth execution for speculative FPSOs. References 1. International Maritime Associates (2006), “Floating Production

Systems,” 2. L.B. Waters, P.P. Smith, and C.A. Prescott (2006), “Leveraging

Lessons Learned Across Multiple Deepwater Projects,” OTC 17918, Proceedings of the Offshore Technology conference, Houston, TX

3. C. Cooper and J. Stear (2005), “Hurricane Climate in the Gulf of Mexico,” OTC 18418, Proceedings of the Offshore Technology conference, Houston, TX.

4. V.L. Hansen, A. Duggal, A. MacMillan, L. Wang and O. Sadó (2004), “Hydrodynamic and Structural Design Challenges in Benign Areas,” Proceedings of the Offshore West Africa Conference, Abuja, Nigeria.

5. A. MacMillan, K.P. Fischer, H. Carlsen, Ø. Goksøyr (2004), ”Newbuild FPSO Corrosion Protection - A Design and Operation Planning Guideline,” OTC 16048, Proceedings of the Offshore Technology Conference, Houston, TX.

6. Karsan, Demir, et al., “ Risk Assessment of a Tanekr Based Floating Production Storage and Offloading (FPSO) System in Deepwater Gulf of Mexico, Offshore Technology Conference, 11000, 1999

7. API RP 2FPS, Recommended Practice for Planning, Designing, and Constructing Floating Production Systems, First Edition, March 2001.

8. Verret, Allen, Hys, Paul, “Deepstar’s Program Related to FPSOs”, Offshore Technology Conference, 10703, 1999.

9. Gilbert, R.B., Ward, E.G., Wolford, A.J. “A Comparative Risk Analysis of FPSO’s with Other Deepwater Production Systems in GOM”, Offshore Technology Conference, 13173, 2001.

10. Cranswick, D. Eve, H., “FPSO EIS Results and Record of Decision” Offshore Technology Conference, 13167, 2001.

11. Daughdrill, W.H., Proctor, R.C., Cushing, J.M., “Recent Regulatory Developments Affecting Floating Production, Storage, and Offloading Systems” Offshore Technology Conference, 13172, 2001.

12. Regg, J.B., “Floating Production, Storage, and Offloading Systems in the Gulf of Mexico OCS: A Regulatory Perspective”, Offshore Technology Conference, 10701, 1999.

13. Memorandum of Agreement between the Minerals Management Service – Department of Interior and United States Coast Guard – Department of Homeland Security, MMS/USCG MOA: OCS 01, 30 September, 2004.

14. Federal Register Volume 64, No. 234, December 7, 1999, “33 CFR Part 140, et al; Outer Continental Shelf Activities Proposed Rule”.

15. USCG Commandant MVI Policy Nov. 13-92, “Floating Production, Storage and Offloading (FPSO) Units, November 12, 1992.

16. Federal Register Volume 70, No. 167, August 30, 2005, “30 CFR Part 250; Oil and Gas and Sulphur Operations in the Outer Continental Shelf – Plans and Information; Final Rule”.

17. Federal Register, Vol. 70, No. 137, Tuesday, July 19, 2005 “Oil and Gas and Sulphur Operations in the Outer Continental Shelf (OCS)—Fixed and Floating Platforms and Structures and Documents Incorporated by Reference”.

18. API RP 14J, Recommended Practice for Design and Hazards Analysis for Offshore Production Facilities, First Edition, September 1, 1993.

Table 1 Distribution of existing FPSO and FSO fleet

Type Single

hull Double

hull Double sides

Un-known

FPSO converted from existing tanker

40% 2% 2% -

FPSO new-built 2% 12% 9% 2% FSO converted from existing tanker

25% 1% - -

FSO new-built 1% 2% 1% 1%

0

20

40

60

80

100

120

1985 1990 1995 2000 2005$0

$10

$20

$30

$40

$50

$60

$70

Figure 1 FPSO fleet development and annual

average world crude price

Figure 2 Speculative FPSO strategies

SPECIFICATION

PROJECT-SPECIFIC NEEDS

TIME1ST OIL

COREELEMENTS

CUSTOMIZATION

SPECULATIVE FPSOADVANTAGE

SPECIFICATION

PROJECT-SPECIFIC NEEDS

TIME1ST OIL

COREELEMENTS

CUSTOMIZATION

SPECULATIVE FPSOADVANTAGE