PeterGray wrote:Seems like they want to do spiral development via a series of IFDs It is certainly one way at it. I had only anticipated one FPSO IFD as a step to a FFD, and of course as a bootstrapping way of breaking a buyers strike. I wonder how suboptimal a string of them are ?
I would wonder too - though not in a position to make a serious judgment!
However, I think your point about a buyers strike is the key. I doubt HUR really see GLA and/or GWA being developed in small steps with multiple FPSOs, but I can understand it is important that they have a viable plan to keep appraising and developing the fields for as long as it takes for a serious suitor, with deep pockets, to appear on a white charger (or however they appear these days WoS).
No one thought they would be where they are now - the assumption was, and I'm sure HUR's aim was to have FO'd or sold out by now, but they've very successfully put up two fingers to the striking buyers and got themselves into a position where they can prove up a lot more value, and start generating meaningful cash. They've played it very well so far, and I'd assume the plan is more of the same until a good offer appears - and if it doesn't they will keep throwing off cash alone (and with Spirit) . It may not prove the most efficient route to market for the oil, but it will be a lot better for HUR than selling out cheap from a weak position.
Agree. Provided that they can get gas export resolved at a meaningful scale they can do this sequentially. It might not even be that suboptimal, but without knowing how much is known (i.e. how long an appraisal campaign would need to be to enable/justify a one-shot FFD decision) one cannot be sure how suboptimal it might be. Therefore I think OGA might be very tolerant from here on in - provided they see that gas export being inserted timeously.
I've seen folk chatting about leasing FPSOs etc. There are a few misunderstandings flying around. The advantages of FPSOs in shallow water (which Rona Ridge is) vs fixed platforms are :
1) onshore/alongside build & integrate & initial commission;
2) relocatable in event of reservoir fizzle;
3) provide own storage & offtake, i.e. no SPAR or oil pipeline needed for export;
4) can be, but don't need to be, leased, i.e. moves balance sheet cost elsewhere (but that still has to be paid for);
5) faster to first oil from decision, esp if a suitable second-hand or conversion exists;
6) 9-months of year for WoS hook-up, not 3-month for WoS heavy lifts (very pertinent right now); don't need offshore heavy lifts at all.
1) Scale tends to be limited to about 130,000 bpd in these environments for typical off-the-shelf stuff*;
2) More costly to build, and to operate;
3) Tend to have shorter lifetimes, or have to come off-station for a mid-life refit;
4) Force a subsea well development as opposed to either platform wells, or hybrid platform & subsea;
5) Can have constraints on the number of turret/buoy interfaces. Technology has moved on in this area since I was last involved in an FPSO project and there are ways around it, but this can be a significant issue. However prolific wells would mean less are needed !
An interesting development challenge, which can clearly be done without needing to resort to a major now that Spirit has come onside (for LinWar). Ideally a major would be involved, but really they could get away with another medium sized company (=Spirit) now for the LanFax part. Oh and there is Whirwind to be drilled at some point before it times-out.
* you can go much larger. The original Schiehallion Suezmax could accomodate 200,000 bopd liquids, and lasted 15-years before it was shagged out. The newer Glen Lyon replacement can do 320,000 bopd. But these are very capex intensive and in Rona water depths very difficult to justify for the sequential field development strategy we are discussing (or at least HUR are proposing as a way of turning a negative into a positive).