EXECUTIVE SUMMARY

www.fpsoroundtables.iqpc.sg
 5 KEEP MACRO TAKEAWAYS
From Our Chairman

Investor confidence is Costs will not stay down

1 key to propelling projects
forward
2 for too long
There have not been any major disruptive
The FPSO industry doesn’t necessarily technological breakthroughs in the FPSO
have this yet because projects continue to industry that will help drive costs down in
be delayed and over budget. the long run.

However, it is important to look within the

3
industry, and compare which stakeholders
and projects are performing better than
others- there can be key learning points
on how to ensure overall on time and on
budget project delivery to boost investor
confidence.
Can FPSO contracting
4
models be re-examined
Manpower shortage is
going to become a big
problem sooner rather
than later
The industry needs to urgently attract
the younger generation and new talent as
soon as possible. Costs for manpower are
going to rise exponentially once projects
pick up and the battle for talent and
experience begins.

for long-term business

sustainability? Communication remains
Stakeholders are finally willing to come
to the table and help each other out
5 key to ensuring successful
projects
throughout the supply chain- we have
Pick up the phone and talk to each other!
seen evidence of greater risk sharing
Have open and transparent discussions.
models emerging.

However, when (re)examining contracting A simple practical example of how

models for FPSO projects, we must communication has become real-time is
remember that it’s the overall project putting all project team stakeholders into
execution cost reductions that matter, not a whatsapp group to encourage constant
individual item and unit costs. and open communication channels!

www.fpsoroundtables.iqpc.sg
 SPECIFIC TABLE TOPIC
TAKEAWAYS
TOPIC 1: Alternate Contracting and Financing Models to Propel FPSO
Projects-Enabling Project Finance through Consortium
Building
 Unlikely that alternate contracting models outside the existing traditional frameworks and
players will enter the market at this stage.
 Project financing for FPSOs likely to be the main and only model for the foreseeable future.
 Although there have been recent cases of alternate contracting models between stakeholders,
this is more the exception rather than the rule.
 Tied to current investment appetite of investors as well- can the FPSO industry convince
investors that they are a safer bet vis-à-vis other opportunities?

TOPIC 2: Justifying the ROI and Results of Value Engineering in Early

Development/FEED Studies
 At the moment there is not much enthusiasm or optimism for FEED studies from FPSO
contractors.
 FEED studies at the moment tend to be focused more on concept developments rather than
actual front end engineering- unless FEED is done in its original essence, it is difficult to see the
value.
 Also early development and value engineering sometimes ironically results in ‘over-
engineering’, especially for the basic stuff- this can be specifically seen when engaging EPC
contractors during this phase, and this can lead to weight issues and challenges.
 Advise to all stakeholders- if you engage in early development and FEED- let’s ensure that we
actually stick to FEED and not move the goalposts.

TOPIC 3: Ensuring On-Time and On-Budget FPSO Project Execution

and Delivery: Avoiding Pitfalls in a ‘Too Big to Fail’
Environment
 Communication is key between all stakeholder groups in the project team: free-flowing and
open communication can often mitigate many problems and risks.
 There will definitely be changes during project execution but its most important how the
project team manages these changes.
 A combined team effort is required to stay within budget and schedule.
 However, the initial strategy has to be set in the right manner, with stakeholders understanding
each others’ risks and having an open and honest conversation about how to mitigate them
from the onset.
 It’s still debatable on whether penalties or incentives are more productive when working in a
project team scenario.
 However, early delivery incentives must be looked at- this is not done enough.
 Limiting the changes in design and freezing the design has also mitigated project delay risks.
 Another issue that affects project execution and delivery is that contract staff tend to leave
their projects early to secure their next project in advance and thereby assuring work for
themselves- can we treat contract staff better and provide them with full benefits so they take
more ownership of their projects?

www.fpsoroundtables.iqpc.sg
 SPECIFIC TABLE TOPIC
TAKEAWAYS
TOPIC 4: Leading by Example: Driving Cost Reductions and Accelerating
Project Schedules via a Top Down Approach
 Operators have started to involve the operations team as early as possible with both the engineering and
execution teams to mitigate risks in project execution.
 Operators have also started to change the way they work with the project team- this is linked to the
contractual strategy and a bonus-based system.
 Would it be possible for the operator to pay a bonus and thereby ensuring the commitment of the whole
supply chain to achieve agreed upon targets?
 The open-book approach with pre-agreed mark ups for vendors and suppliers to mitigate risks is also an
alternate model to help accelerate project schedules.
 Project teams can also be restructured to reduce double roles between operator and FPSO contractor.
 Double roles often occur when its an EPC contract; whereas JVs allows the chance for partners to split the
scope of work more evenly and equally.

TOPIC 5: Enhancing and Streamlining Supplier Management and Vendor

Selection Criteria for Reduced Overall Lifecycle Costs and Improved
Operational Performance
 The process of vendor selection and supplier management can be broken down into 2 major categories-
one based on factual criteria, the second on relationships and previous experiences.
 You need to consider both categories to be as fair as possible while choosing the best vendors for your
project.
 There are ways to manage the risk in your 3rd party selections- namely doing extensive research about
your vendors during the selection phase.
 Criterion to evaluate include: the vendor’s financial stability, HSSE record, technical capabilities, compliance
record, past track record, timing and delivery of solutions, geo-political strengths, and local content
expertise and experience.
 However, these evaluations often take considerable time and research, a luxury that FPSO contractors and
operators do not necessarily have.
 Thus, would it be possible for FPSO contractors and oil companies to share information about key
vendors? Can they work together to reduce redundancy?
 Post-selection, managing vendor performance is also very important.
 The downturn has provided some examples of how vendor performance has dropped in certain projects.
 Lastly, managing relationships and building trust is critical to ensure better performance- vendors are
more likely to invest in you when there is trust and relationships built- and help with you your challenges-
ultimately it’s a two-way street.
 Double roles often occur when its an EPC contract; whereas JVs allows the chance for partners to split the
scope of work more evenly and equally.

TOPIC 6: Enabling Projects in a Recovering Market: What Oil Companies, FPSO

Contractors and Stakeholders Need to Consider and Commit to
 Oil operator and FPSO contractors, and FPSO contractors and subcontractors all need to develop more
trust when working on projects.
 Each party must be allowed to get on with their jobs.
 Project scopes and design work must not be modified once the contract is signed- to minimize last minute
changes will often times lead to project delays and cost overruns and invariably break down the working
relationship.

www.fpsoroundtables.iqpc.sg
 4 - 5 SEPTEMBER
Marina Bay Sands Convention
Centre, Singapore

www.fpsoworldcongress.com

Main Congress:
29-30 May 2018 Don’t Miss
Our 3 Technical
Pre-Congress Workshops:
Workshops!
28 May 2018 Visit our website
for more!
Venue:
Rio de Janeiro, Brazil

Delivering cost-effective FPSO

projects while working within
the confines of the Brazilian
regulatory framework

FEATURED SPEAKERS: WHY YOU CANNOT MISS THE FPSO

BRAZIL CONGRESS 2018:
¡ The ONLY FPSO-focused event in Brazil that covers the ENTIRE FPSO
life cycle - from commercial and financing strategies, contracting, field
development, project execution and operations

¡ Obtain critical market intelligence and outlook for a market that is

beginning to pick up

¡ Practical strategies that address issues across the technical, operational

Jorge Mitidieri Chris Brett Carlos Rocha and commercial aspects of FPSO operations in order to reduce cost,
Executive Vice- CEO Director productivity in preparation for market recovery
President Teekay Offshore IHS Markit
¡ Meet and network with senior stakeholders from FPSO contractors and
OCYAN
oil companies active in the Brazilian market

www.fpsobrazilcongress.com