FEATURE | Australia’s use of floating production systems

Australia has been and continues to be one of the most extensive users of ship-based floating production storage and offloading (FPSO) systems in the world oil and gas industry. There are more than 200 in operation around the world right now, of which seven are working in Australian waters. This might not seem a lot, but over the whole history of FPSO use in Australia, some 22 have worked or are working here.

The vessels working here have frequently been leaders in technical innovation, size and production capacity. The remoteness and distance from existing infrastructure of the oil and gas fields on the North West Shelf and Timor Sea and the frequency of cyclonic weather conditions led to the use of FPSOs often equipped with disconnectable turret mooring systems. The size and production rates of some oil fields also encouraged the use of purpose-constructed very large units with high daily throughput capacities.

Woodside’s FPSO Northern Endeavour, introduced in 1999, had a production capacity of 180,000 barrels of oil per day (bopd), which was the largest in the world at the time and Shell’s LNG FPSO Prelude, now operating, is the largest floating object ever constructed by mankind.

Many of the Australia-based FPSOs have continued to be fully classed as ships, in order to have the ability to sail away in the event of a cyclone, or in order to relocate to another field or for drydock under their own power. As such, they have employed full Australian marine crew as well as the oil and gas processing personnel typical of an offshore platform.

Most of the world’s main FPSO-owning and -operating contractors have had offices here, employing Australian personnel and directing the offshore activities of their FPSO vessels. These include MODEC, Bluewater, Teekay, and shortly BW Offshore. Others who have provided units have included Bumi Armada, Sea Production and Vanguard Floating Production.

Australia’s offshore oil and gas companies have sometimes chosen to build, own and operate their own FPSO’s. These include Woodside, BHP, Santos and Shell and typically this happens when the oil or gas field is very large, with a long production lifetime of 20 years or more, allowing the capital investment in the FPSO to be fully recouped over one project. Fields with shorter life are typically serviced by contractors, who will aim to relocate their units to other fields once the initial ones are depleted.

Early FPSOs in Australia

BHP Petroleum was the pioneer in the use of FPSOs in the Australian market. The very first was Jabiru Venture, which began operations in 1986 in the Timor Sea. She was a converted tanker, permanently connected to a riser turret mooring. A number of OSSA members had experience with this unit. The riser mooring was installed with the assistance of the AOS AHTSV Lady Cynthia and Rob Thornton, an OSSA member, managed much of the work for BHP.

Challis Venture came shortly afterwards and then the first contractor owned and operated FPSO, Acqua Blu, from Bluewater Offshore Productions Systems. This company was unique in the annals of the FPSO industry in being the only one 50 per cent owned by a company in the AHTSV business, namely P&O Australia/AOS. For some years, I had the exciting and challenging task of running this business, which also included FPSOs in Indonesia and China.

Woodside entered the picture in 1995 with Cossack Pioneer and 1999 with Northern Endeavour. She was a newbuild unit, the largest in the world at the time with the highest daily production rate of a massive 180,000 bopd and remained in operation for 21 years.

Some issues have recently emerged around her removal and the abandonment of the oilfield by another operator, but that’s a story for another time.

Post 2000

In the post Millennium era, contractors became more prominent as suppliers and operators of FPSOs, with the likes of Sea Production, Modec, Maersk, Teekay and Vanguard all involved.

As MD of Vanguard, I lost count of the number of trips I made from our office in London to Perth to secure the contract for Four Vanguard to produce the Woolybutt field for ENI, and later to Singapore to monitor conversion at Keppel Shipyard. Four Vanguard, like Acqua Blu back in the early days, had a dis-connectable mooring system, and thus was classed as a ship, with a full Australian marine crew, working alongside the oil and gas process operators. Because she provided a relatively low-cost solution for ENI, she enabled production to continue for nine years from a small field that might not otherwise have been developed, one of the advantages FPSOs can provide.

She also provided stable employment for many seafarers and helped give ENI the confidence to later develop other fields in Australia with FPSOs such as Kitan in 2011, using Bluewater’s Glas Dowr.

Today’s units

There are seven FPSOs in operation in Australian waters in 2022, and at least one other due in a couple of years’ time.

Perhaps the most notable is Prelude, which is owned and operated by Shell, and produces gas and condensate (light crude oil). The produced gas is converted to LNG and exported direct from the unit to overseas markets in LNG carriers. Prelude is the world’s largest floating object and the largest ever constructed by mankind. She is an amazing technological achievement, although not classed as a ship, since she has no propulsion and is permanently moored at the field.

Contribution to the maritime industry and to Australia

The 22 FPSOs that have worked – or are working now – in Australia have made a profoundly positive contribution to the country’s energy exports, investment in infrastructure, government tax revenues, and training and employment opportunities for seafarers and process operators. They have also created demand for the provision of support vessel services for both installation and operational support. New technological developments have also been stimulated by the need to meet the sometimes-severe climatic conditions in Australian waters, such as disconnectable turret mooring systems and the latest very large fixed systems designed to withstand even the strongest cyclones.

It’s been quite a success story over the past 35 years and I’m sure many new chapters are still to come!

Some anecdotes

I welcome any contributions from members who would like to offer some anecdotes from their FPSO experiences. For myself, a couple:

• On many occasions during my time associated with Vanguard and the Woolybutt field, I had to explain to bemused or amused contacts that the oilfield’s name was not a reference to the posterior of a sheep, but rather to a species of tree endemic to northern Australia – the eucalyptus miniata, or Darwin woolybutt. They are common in the Kimberleys near the location of the oilfield. Despite that, I think the people in ENI who named the field must have had a sense of humour!
• The FPSO Four Vanguard was actually the first provided by Vanguard; the Italian company that originally owned the ship and became our partner gave all their vessels the prefix Four, after its four founding brothers. But from a marketing point of view, it was quite useful: people assumed there were already three other FPSOs in the Vanguard fleet!