By Alex Endress, Editorial Coordinator
Increasing costs in deepwater projects were challenging operators’ returns long before $50/bbl oil. But now, more than ever, trimming CAPEX requirements has become essential to make certain projects economic. To help address this challenge, oilfield service companies FMC Technologies and Technip are teaming up to streamline subsea design, delivery and maintenance through a new joint venture called Forsys Subsea.
“Over the next 10 years, our industry has to deliver almost 40 million additional barrels of oil per day just to meet demand,” John Gremp, FMC Technologies Chairman, President and CEO, said at a presentation at the 2015 OTC in Houston. “Almost a third of it has to come from deepwater because that’s where 80% of discoveries have been over the last four years. But there’s a problem… the cost to develop those deepwater reserves has increased. Over the last five years, despite when oil prices were at $90 to $100 per barrel, the operators’ terms on investments in these fields were declining.”
DC Editor/Publisher Mike Killalea moderated a group discussion about the Forsys alliance at OTC on 5 May. Mr Gremp participated along with Thierry Pilenko, Techip Chairman and CEO; Forsys CEO Rasmus Sunde; and Alain Marion, Forsys Chief Technology Officer.
“Something fundamental has to change, and that’s what our two companies agreed to do. We’re going to change the business model to do something substantially different,” Mr Gremp said. Forsys will combine technologies and expertise from both FMC and Technip, reducing the interfaces of the subsea umbilical, riser and flowline systems (SURF) and subsea production and processing systems (SPS).
Three key areas that Forsys will focus on are: (1) early involvement during conceptual selection phase of front-end engineering and design, (2) integrated life-of-field well surveillance, monitoring, data interpretation and advisory, (3) joint R&D, driving technological innovation in order to push greater efficiencies and decrease development cost. “We have no overlap between our companies. We are not competitors,” Mr Pilenko, said of Technip and FMC. “We are completely complimentary and, therefore, we believe this is going to be the most powerful alliance that you see in this space.”
Mr Pilenko said the two companies began working on this partnership a year ago, brainstorming ways to further streamline subsea engineering. “It took us a year to actually mature the process and come up with Forsys and the alliance… With what we know today, we can achieve very easily about 30% savings on the entire subsea system, when you just put the two companies together and include not only the conceptual but also the execution,” he said.
Mr Sunde said operators will be able to save CAPEX through Forsys’ work on “the front end to design the subsea architecture and to demonstrate what (Forsys) can achieve,” he said. “The 30% that has been mentioned – that is not coming from the air, so to speak – that is based on work done. If you really think about the merits of optimizing the SPS and SURF, designing a new generation of subsea infrastructure and deeply refining a lot of interfaces, we are pretty confident that given the project, we can demonstrate 30% CAPEX reduction.”