signed to accommodate additional drill center tie-ins and in-field flowlines as required.
Another benefit of the phased produc-tion/two SFPS strategy when compared to a
larger and more conventional facility is that
after major depletion of the reservoir, one of
the two SFPSs can be released and used to
repeat this cycle for another development.
Just as production was phased up, it can be
It is important to note when considering current reservoir discovery statistics
regarding large fields vs. small fields, the
probabilities favor smaller discoveries. Use
of a SFPS can serve as an economic solution
to develop these smaller fields, particularly
if there is not an existing host platform available for a subsea tieback.
The two smaller FPSs (SFPS and ESFPS)
could either be a specific company standard,
designed to meet all, or most, of the company’s specifications and regional practices, or
it could be a third-party standard – several
of which exist today and are in production.
If electing to develop a new standard to
meet company requirements, operators
should make every effort not to over optimize the facility (after meeting all regulatory and safety requirements). Rather they
should employ a basic design, which will
later be aligned with each field’s requirements during the site-specific engineering
phase. Areas such as gas compression, flow
assurance, and export solutions will all vary
from field to field. The use of “place holders” during the engineering of the standard
can generally provide sufficient flexibility to
accommodate specific field requirements,
which are determined only after the initial
wells are drilled (i.e., one size fits most).
Conventional vs. phased approach
To more accurately quantify the benefits
of using a phased strategy, let’s take a rep-
resentative GoM reservoir (200 MMboe)
which would normally be developed using a
FPS large (100,000 b/d) and compare this
development strategy using two smaller
FPSs, both with a capacity of 40,000 b/d. To
obtain as close to an “apple-to-apple” com-
parison as possible, we will assume certain
commercial values and use the same esti-
mated itemized cost shown in the table for
both development plans. Timing of events
will vary between cases, as well as spend
The total spend for Strategy A (
conventional approach-large FPS) is $3.895 billion and
for Strategy B (phased/two SFPS approach),
$3.600 billion. This $295 million difference is
due to the elimination of two appraisal wells
($300 million), a $45 million reduction in engineering, offset by a $50 million addition for
the cost of two smaller FPSs vs. one large FPS.
It is important to highlight that the per
barrel total installed cost (TIC) of two SFPs
is higher than the per barrel TIC of the
larger FPS. This is to be expected due to in-
creased efficiencies in constructing the larg-
er unit vs. the smaller units. While the costs
outlined are merely an estimate and do not
reflect all developments, they are represen-
tative of current industry expectations when
performing project NPV comparisons.
The P- 50 production profiles for Strategy A
and Strategy B will be the basis for revenue
generation assuming a flat $45/bbl for the life
of the field with no royalties, taxes, and other
common cost deducted from either.
Utilizing the respective spend curves and
P- 50 curves for each strategy yields a NPV11
of $29.08 million with a pre-tax IRR of 11.2%
for Strategy A, and an NPV11 of $427.57 mil-
lion with a pre-tax IRR of 14.5% for Strategy B.
This result is a bit surprising considering
the monetary difference in the two strategies
is only $295 million. However, the financial
reduction along with the early recognition
of revenue for the phased strategy was sufficient to overcome the increased cost per barrel of the two SFPSs, as well as the reduction
in total nameplate production capacity.
The phased production strategy should
not be confused with using an early production system (EPS), which is intended to be
replaced with a full field development FPS.
Generally, by the time the full field FPS is
Itemized cost breakdown of deepwater field development.
Item/Event Estimated Cost
Discovery well $150 million
Appraisal wells, cost per well $150 million
Production wells, including completions $200 million
Total engineering, LFPS $115 million
Total engineering, SFPS $70 million
SURF, cost per production well $60 million
LFPS TIC ($9,500/bbl) $950 million
SFPS TIC ($12,500/bbl) $500 million
Spend profiles for conventional FPS development strategy vs. phased/two SFPS strategy.
P- 50 production profiles for conventional FPS development
strategy vs. phased/two SFPS strategy.