The First FPSO in the US Gulf of Mexico: The 14-Year Journey

Abstract

Editor’s note: This is the first of two articles on the technical challenges and regulatory hurdles that were overcome to allow the use of floating production, storage, and offloading vessels (FPSOs) in the US Gulf of Mexico (GOM). The FPSO that will be installed at Petrobras’ Cascade-Chinook development in the deepwater GOM is planned for mid-2010 startup. The practical start of the journey of the first floating production, storage, and offloading (FPSO) vessel to the US Gulf of Mexico (GOM) came in 1996, when an operator thought that an FPSO might be a viable candidate to efficiently develop a deepwater prospect. Back then there were a number of FPSOs in operation in different parts of the world, so the idea was not revolutionary. Several conference papers at the time showed potential arrangements for an FPSO at Texaco’s Fuji development. As events unfolded, estimates of reserves were not as good as initially expected and the Fuji prospect was abandoned, but the idea of considering an FPSO in the GOM had taken hold. During 1998–1999, Shell and its partner BP conducted feasibility studies for using an FPSO at its Na Kika development, involving study work by leading FPSO contractors. These studies were not just simple paper exercises, although traditional paper studies were made. Groups of facilities and subsurface experts met, examining every aspect of proposed candidates for field development and debating the pros and cons of solutions. Many in the industry may not appreciate the rigor of these debates unless you were in the middle of them. And in the middle of all this was a patient, objective participant, bringing out the best in everyone, George Rodenbusch of Shell (see sidebar). Despite every consideration given to the FPSO option, all these debates and studies led to the conclusion that for the particular field at hand an FPSO was not the best solution, and today a semisubmersible is the centerpiece of the Na Kika development. Again in 2000–2001 a supermajor looked exhaustively at the FPSO option but, weighing the regulatory uncertainties at the time and competitive pipeline economics, the FPSO and shuttle-tanker combination lost out to spars and semisubmersibles. About this time another development for another operator prompted presentations at an SPE lunch meeting in Houston showing shuttle tankers and an FPSO as the way to go. But that development became a tension leg platform (TLP), exporting via pipeline to produce that asset. During this period some operators—often from outside the US—concluded that there was prejudice in the US against FPSOs, but the evidence of these repeated considerations of FPSOs over the years does not bear this out. Regulatory expert Rick Meyer of Shell summed it up in a presentation at an SPE workshop in 2002: “Economics, economics, economics.” It was more a matter of just not having the right project for an FPSO in the GOM.