SBM Offshore: Capitalising on New Opportunities
Words by Dennis Vinkoert
Recently, SBM has undergone organisational changes to focus on core capabilities and core products: the lease or sale of FPSOs and related services and products. Demand for FPSOs has grown as is reflected in SBM’s IFRS order book. Dennis Vinkoert recently visited SBM Offhore’s premises in Schiedam, the Netherlands, where he was cordially welcomed by Managing Director Mrs Saskia Kunst and Technology Director Mr Jaap-Harm Westhuis.
Netherlands
SBM Offshore provides floating production solutions to the offshore energy industry, over the full product life cycle building vessels for either sale or long-term lease.
In addition to FPSOs, SBM Offshore has a track record in other solutions and products for the oil industry, including turrets and turret mooring systems, semi-submersible and tension leg platform (TLP) production units, topsides and also turrets for FLNG units, as well as brownfield activities.
Markets Segments
CAPEX compression has led to pressure from clients to reduce development costs and in particular counteract increased drilling costs of reservoirs in deeper water. These market dynamics had already translated into delays for awards of projects to service providers such as SBM Offshore, and the trend is set to continue.
Despite this, oil companies continue to search for access to new production and have a strong appetite to develop new areas. SBM Offshore continues to engage with clients at an early stage, enabling the company to offer better solutions.
Offshore Activities
Since 2012, SBM has put a strong focus on FPSOs and Turret Mooring Systems in order to create a stable and predictable workload and restore stakeholder confidence. At the beginning of 2014, the time was considered right to widen the product portfolio and gain access to a larger pool of floating production prospects in the future. The existing Tension Leg Platforms /Semi-submersibles technology and the design concept for Floating Liquefied Natural Gas were re-introduced and the traditional terminals business was rejuvenated via a separate structure.
Key Achievements
November 2014 marked one of the company’s major achievements with the delivery and first oil of FPSO Cidade de Ilhabela for Petrobras offshore Brazil – in 2,140m water depth, the vessel is the deepest in the operating fleet; at 150,000bpd of oil it has the largest capacity. The topsides weighs 24,000t of which 12,500t were built in the company’s Joint Venture Brasa yard in Brazil.
The same month also marked the successful completion of the life extension and relocation of N’Goma FPSO, which started producing offshore Angola for Eni. SBM Offshore converted the large FPSO – which included a major upgrade of the hall, processing equipment, topsides and turret and new module integration. The construction and integration onboard of two complex modules took place at Paenal, the company’s Joint Venture shipyard in Angola. The vessel is operated by OPS – an equal joint venture company between Sonangol and SBM Offshore.
The two aforementioned FPSO projects demonstrate SBM’s worldwide expertise and its EPCI capacity across the life-cycle as well as illustrating the bespoke nature of FPSOs.
The twin FPSOs Cidade de Maricá and Cidade de Saquarema are undergoing construction and conversion work at the Chengxi yard in China; the same yard that successfully completed the equivalent scope on FPSO Cidade de Ilhabela. The plan of action for the twin FPSOs will mirror that for Ilhabela. The vessels will be transferred from China to the Brasa yard in Rio in 2015 where integration of the hulls and the remaining topsides will take place. A significant number of the modules are being fabricated at Brasa. Progress was made according to schedule in 2014.
SBM Offshore is currently constructing a state-of-the-art FPSO that will produce at the record-breaking depth of 2,900m for Shell’s Stones development in the Gulf of Mexico. Its pioneering, disconnectable, internal turret and mooring system are designed for the tropical storm conditions of the region. Once in operation in 2016, the FPSO will hold several world records, including deepest floating production unit ever installed, deepest FPSO and the first disconnectable system with steel catenary risers.
Keeping the Competitive Edge
Boundaries are fading as several competitors are developing execution capabilities for larger size conversion projects and hence obtain a position in SBM’s market segment. To stay ahead of the competition, SBM Offshore is continuously developing new, differentiating solutions that meet the clients’ demands identified earlier. This includes:
- An extensive Technology Development program that focuses on enabling access to new frontiers and production and on reducing the cost of existing solutions
- Leveraging the company’s experience and business model – that is already in place in Angola and Brazil – when entering new countries in order to develop local sustainable business, meet local content requirements and invest in the communities
- Promoting the company’s track record and outstanding historical performance in both project delivery and operations, which should provide clients the necessary comfort in their search for ‘predictability of outcome’
- Offering economical solutions across the full lifecycle of projects, thereby leveraging the full suite of floating production solutions that the company can offer and the depth of experience and expertise, executing the work from cradle to grave.
Outlook
Although the company signed a few key contracts, 2014 was a slow year for the entire industry. With the low oil price and the pressure on capital spending by its clients, SBM Offshore predicts that this trend will continue for the short term. In response to the current climate and to reignite SBM’s presence in the market, the company has adjusted its organisation with effect from January 2015, with the aim to further improve its client-focus for a more collaborative, solution-driven approach.
To further match its clients’ expectations as well as increase the company’s competitiveness, SBM Offshore revised its business development and acquisition approach in closer coordination with project execution, in addition to creating regional centres with a specialisation on a set of Product lines. With dedicated teams focused on providing best possible technical and commercial solutions and by leveraging its core competencies with a more efficient and responsive organisation, SBM Offshore expects to be able to capitalise upon new opportunities and prospects.
