New oil platform fuels cooperation

The concept is so simple that veterans in the oil and gas industry must wonder why they didn't think of it first.

Norwegian company Sevan Marine redesigned the oil platform to give the structure more storage and make it more stable - then had seven of them built in China.

Known in the industry as a "floating production, storage and off-loading (FPSO) unit", Sevan's Marine's cylindrical oil platform provides greater stability in high seas and allows storage capacity of up to 2 million barrels of crude oil.

FPSOs are also cheaper to produce and offer operational flexibility compared to traditional oil platforms.

When it came to building the patented structure, Sevan Marine went directly to China, where it built platforms at the Yantai Raffles shipyards in Nantong and Hantong.

"Building in China was a natural choice for us. The shipyards are able to deliver a high level of quality at competitive prices and are very capable of and eager to exceed our expectations," recalled CEO Jan Erik Tveteraas.

Under its business model, Sevan Marine engineers, builds, owns and operates their own FPSO platforms under license to oil companies for drilling, storage and production.

The arrangement gives the company more control over the value chain while offering more value to its partners, Tveteraas said.

An example is Sevan Piranema that recently started oil production in Brazil for Petrobras with an oil storage capacity of 300,000 barrels, a processing capacity of 30,000 barrels a day and a gas injection capacity of 3.6 million sq m a day in water depth of between 1,000 to 1,600 m.

"Into the future, we look forward to building more and more of our platforms completely in China, rather than towing them back to Europe for the fitting of the most technical components," said Tveteraas.

"We're confident that we can soon accomplish that level of complexity there in the China shipyard."

"The only challenge will be to see if China can continue their cost advantage. If they can continue with the cost advantage while still making gains in quality and productivity, we'll definitely look forward to building in China for the years to come. And naturally, with the significant advantages incorporated into our FPSO design, we're certain that China will become an important market for us, too, for partnerships for either drilling or floating production," he added.

(China Daily 04/14/2008 page28)