// ISSUE 11 // Q Currents ISSUE 11 // OCTOBER SBM Offshore / Currents 1

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1 // ISSUE 11 // Q Currents ISSUE 11 // OCTOBER 2015 SBM Offshore / Currents 1

2 // ISSUE 11 // Q Currents ISSUE 11 // OCTOBER Currents News in brief 6 Turrets: The Key Facts 10 Angola s shipyard builds on Paenal success 4 12 Four FPSOs in four years 13 SBM s G3 FPSO 16 Sea Power 6 18 SBM technology On the cover: The module lifting campaign for FPSO Cidade de Maricá underway at Brasa shipyard using the Pelicano-1 heavy lift barge crane. 12 We want to hear from you: If you have comments about any of the articles in this issue or any ideas for future issues, send them to [email protected] Currents is issued by the Group Communications Department SBM Offshore / Currents 2

3 Welcome Philippe Barril SBM Offshore Chief Operating Officer Welcome to Currents Joining SBM Offshore in February this year proved to be good timing as the company kicked off with a dynamic reorganisation of its sales teams, while a visit to OTC in Houston in May ensured that I spent quality time with many of our clients. In June a visit onboard FPSO Cidade de Ilhabela allowed me to see first-hand the expertise of our operations offshore as the vessel celebrated its first six months in production offshore Brazil. Ilhabela contributes to our sound and reliable operational performance of over 99% uptime and 4,464,347,593 bbls cumulative oil produced over 265 cumulative contract years. The FPSO is a model example of how our pioneering technology is driving the development of the complex, pre-salt fields offshore Brazil. The high-capacity vessel is the blueprint for the next two FPSOs that SBM is currently constructing in parallel for Petrobras. In July our Rio-based joint venture yard Brasa welcomed FPSO Cidade de Maricá for final integration of the vessel s modules fabricated in Brazil. Maricá is the third in our series of four pre-salt FPSOs. As our Half-Year Results in August revealed SBM is financially robust and thus reliable; we can look to the future with our clients, engaging with them to find solutions to develop fields at the new challenging oil price level. As Chief Operating Officer, I am responsible for overseeing project execution, business acquisition and fleet operations. My priority is to support our worldwide teams and to ensure that our commitment to our clients is fulfilled to deliver safely, on time and within budget just as we have consistently done in the past. 21 SBM Offshore / Currents 3

4 Currents News Thunder Hawk Tiebacks A Production Handling Agreement (PHA) with Noble Energy has been signed to produce the Big Bend and Dantzler fields to the Thunder Hawk DeepDraft Semi located in 1,847 metres of water in the Gulf of Mexico (GoM). The Thunder Hawk platform allows for a cost effective development solution for Noble Energy and its partners. Production fees associated with produced volumes are estimated to lead up to projected revenue of US$400 million for SBM to be delivered over the ten-year primary contract period. First oil from Big Bend and Dantzler are expected in late 2015 and first quarter 2016 respectively. At these levels both fields will utilise a maximum of 85% of total daily asset capacity. Brownfield construction to upgrade the facility is being handled by Noble Energy. The Big Bend field is 18 miles from the Thunder Hawk platform in 2,196 metres of water in Mississippi Canyon Block 698. The Dantzler field is 7 miles from the Thunder Hawk platform in 2,008 metres feet of water in Mississippi Canyon Block 782. The Thunder Hawk DeepDraft Semi, installed in July 2009, was developed as a Steel Catenary Riser (SCR) friendly floater solution. The deck and hull were integrated at quayside, avoiding costly offshore lifting and system commissioning operations. FSO Yetagun life extension project confirmed SBM Offshore has confirmed the three-year extension of the FSO Yetagun O&M (Operations and Maintenance) contract with Petronas, with further options of up to 5 years, as well as an extensive FSO upgrade project. Since 2000, when the FSO commenced operations in the Yetagun field offshore Myanmar, the unit owned and operated by a joint venture between SBM (75%) and Mitsubishi (25%) has turned in a remarkable record of 100% uptime with zero lost time incidents (LTI). That the unit has been operating for fifteen years without incident is testament to the high quality of SBM s Management System and a highly dedicated and professional crew whose caring approach towards human life and the asset has been exceptional, said Philippe Moulin, SBM s Area Operations Manager in Kuala Lumpur. SBM s Kuala Lumpur Regional Centre is in fast track mode, having already begun work on the Yetagun Life Extension project. Chain replacement work has already been safely and successfully completed. Further works include hull refurbishment, repairs to cargo tanks and the engine room, and corrosion protection renewal. The life extension project is expected to take 18 months with all works scheduled to take place offshore without shutting down production. Green recycling Since decommissioning and departure from their fields at the end of 2014, FPSO Brasil and FPSO Kuito are now both at their respective shipyards in China and Turkey where the green recycling phase is currently taking place. SBM Offshore aims to minimise the social impact and environmental footprint related to all recycling activities at the end of life. We adhere not only to applicable laws, rules and regulations, but also to international guidelines such as the International Convention for the Safe and Environmentally Sound Recycling of Ships (the Hong Kong Convention ) of the International Maritime Organisation of the United Nations. SBM Offshore / Currents 4

5 Imodco off to a good start Following the creation last year of two new companies set up to build on SBM Offshore s traditional CALM Buoy technology, Imodco Terminals and Imodco Services have already been awarded a number of contracts, demonstrating clients confidence in the new entities. Imodco reports the signing of an Engineering, Procurement and Construction contract with Petronas for a replacement CALM Buoy for the Melaka refinery in Malaysia, while Dubai Petroleum Establishment (DPE) signed an extensive contract for the supply and installation of a CALM Buoy, six mooring lines, two PLEM valves, one mooring hawser and two subsea and floating flexible lines for the Fateh Field, offshore Dubai. The latest contract was awarded by Total E&P Congo for the engineering, procurement, supply, construction, pre-commissioning, and commissioning of the new Djeno Oil Terminal, as part of the Moho Bilondo expansion project, which comprises of an ultra-deepwater field offshore the Republic of Congo. Imodco Terminals Sales and Marketing Director Aart Ligterink said: Securing these important contracts with established clients so soon after Imodco Terminals was created is a very good start for us. Clients clearly trust Imodco as the proactive and responsive partner of choice. LIFE DAY: it s in YOUR hands! Last year SBM Offshore launched its LIFE 365 programme to increase awareness of health, safety, security and environmental (HSSE) issues across the SBM community. And 2015 s Life Day events have furthered that commitment. Kicking off across SBM locations around the world, the programme was followed by over 13,500 employees, contractors, clients, joint venture partners, vendors, and community stakeholders, over 47 sites, in 14 countries worldwide. This year s In MY hands! theme focused on the positive impact individual contributions can make on collective performance with a number of safety stand-downs and workshops aimed at encouraging further engagement on a personal level. Erik van Kuijk, Group HSSE Director, said: The Life Day concept is really making a difference in strengthening company-wide commitment on all HSSE aspects. Our employees contribution has been inspiring and their continued support for Life Day is the driving force behind its success. Client Technology Days SBM hosts several Client Technology Days throughout the year to discuss its latest products and technologies. It provides also the opportunity for SBM to listen to customers and better understand the key technical challenges they face on current and future projects. The feedback is important to developing technologies that best suit industry requirements. Pictured here is the 24-member team from Sonangol participating in a Client Technology Day in March in Luanda, Angola. SBM Offshore / Currents 5

6 // ISSUE 11 // OCTOBER 2015 Turrets trending for increased mooring loads and deeper seas SBM Offshore / Currents 6

7 Current projects for SBM include the ground-breaking trio of giant turrets destined for Shell s Prelude FLNG, BP s Glen Lyon FPSO for the Quad 204 field and Inpex s FPSO for its Ichthys LNG project. Having supplied close to 50 turret mooring systems to date for different clients, SBM has demonstrated its ability to deliver solutions. Now these three projects cement SBM s position as the industry s leading supplier for mooring systems in harsh deep sea environments. Shell Prelude FLNG project - the world s largest floating facility will feature the world s largest internal turret mooring system, weighing some 12,000 tonnes. Designed by SBM Offshore, this complex turret is progressing with fabrication work undertaken in Dubai now completed and integration currently taking place in South Korea. Designed specifically to allow the facility to remain on station for 25 years in extreme weather conditions, the turret allows the vessel to weathervane around its moorings. SBM s proprietary turret design consists of five modules all of which have been delivered to SHI s Goeje shipyard for integration with the hull. Four groups of four mooring lines secure the Prelude FLNG to anchor points at water depths down to 250 metres which, in turn, connect the vessel to anchor piles in the seabed. The 93m high turret also connects four subsea risers between the subsea production equipment and the vessel s topside processing equipment, although the turret has slots available for 20 risers should there be a requirement. With a 600,000 tonne displacement, Prelude FLNG is designed to produce 3.6mtpa of liquefied natural gas (LNG), 1.3mtpa of condensate and 0.4mtpa of liquefied petroleum gas (LPG) and due to a location in cyclone alley, the turret system has been designed to withstand unprecedented mooring loads of up to 10,000 tonnes of horizontal force. Until Prelude and Ichthys, which have similar mooring loads and water depths, the greatest horizontal forces for which we had designed was 5000 tonnes. This was the BP Skarv FPSO turret which is now operating successfully in the Norwegian North Sea. However, we expect more of these large systems in the future, there is virtually no limit on the mooring loads we can design for using our bogie weathervaning system, says Andrew Newport SBM Offshore Monaco Technology Director. SBM turret for Inpex Ichthys FPSO Indeed, despite its smaller hull size the least demanding of this trio of titanic turrets to build, the Ichthys FPSO mooring system is not lacking in complexity and, like the Prelude system, it also has a 10,000 tonne mooring load capacity due to its location in an area prone to high category cyclones. The first of three Ichthys turret modules were transported from Singapore s Keppel shipyard in October 2014 for integration with the 336 metre hull by South Korean builder DSME, and the remaining two modules the gantry and manifold were delivered in April this year. When fully integrated, the 9,500 tonne, 85 metre high turret will feature the largest swivel stack ever built by SBM, at almost 29 metres high with 16 swivel units. It is the most complex manifold and swivel stack we ve ever built. Also, the 40-year design life of the turret is a first in the industry, says Newport. Almost everything that will enter or leave the FPSO will do so through the turret through chemical injection lines, transfers lines or control and power cables that provide it with fluid, gas and power from the nearby central processing facility said Ichthys LNG project SBM Offshore / Currents 7

8 Offshore Director Claude Cahuzac, in a press statement. The field in the Browse Basin, offshore Western Australia is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with about 100,000 barrels of condensate per day at peak. Whilst offering their own technical challenges, FPSO operations in the tropical waters offshore Australia are relatively benign outside of the cyclone season compared to the conditions faced on the UK s Atlantic frontier, west of Shetland, where BP s Quad 204 project is located. And although the turret installed in this unit, the Glen Lyon FPSO, has not been designed to withstand a cyclonic event, the severe environment and the high number of risers that this turret supports establishes it as one of the most technically advanced units SBM has designed and built. FPSO Glen Lyon turret The Glen Lyon FPSO turret has capacity for up to 28 riser slots with anchor legs grouped into four clusters of five mooring lines each to suit the existing subsea infrastructure. With a 22 metre diameter and overall height of 94 metres, the 10,300 tonne arrangement supports a stack of 14 swivels, stands 29 metres high and weighs 265 tonnes. Installation of the manifold and gantry took place in January 2014 with final integration and commissioning in the October. Integration of the Quad 204 turret with the vessel was completed in Korea in first-half 2015 and BP has accepted delivery. BP has announced that the FPSO and its subsea structures will be installed in modules and will be producing in SBM Offshore / Currents 8

9 The lower turret, delivered by SBM, being installed into INPEX s Ichthys FPSO Arctic Development Laurent Agussol, Project Manager Quad 204 Project, now Director of SBM Turret Product Line, says the trend for systems with a longer life-span, capable of operating in harsher, deep sea environments is increasing but this does not in itself create any significant technical hurdles. Arctic operation is an altogether different story, however. Whilst it is difficult to contemplate oil and gas development and production demanding more advanced internal or external turret solutions, the slow but sure move to field development in arctic waters will inevitably bring forth altogether new technological challenges Referring to the paper Disconnectable Mooring Systems for Arctic Conditions, presented by SBM s Bauduin, Boulard, Caille and Newport at the OTC conference in May, Agussol, says: Disconnecting a unit operating in the arctic is an issue because of the impact and high loads encountered when ice Turret technology has evolved considerably since SBM Offshore first pioneered the FPSO mooring system in the 1980s, having built over 50 turrets. builds up around a stationary hullshaped structure. This does present unique challenges which will require the development of new techniques to ensure the safe connection and disconnection of units in these harsh environments. SBM Offshore / Currents 9

10 Paenal builds on its Solid Reputation A year on since the successful delivery of N Goma FPSO for Eni, Angolan shipyard Paenal is progressing with the construction of two modules for CABGOC Mafumeira Sul development. They represent the biggest topsides ever fabricated in Angola. CABGOC, Chevron s affiliate, awarded Paenal in a consortium with South Korea s DSME a contract for the fabrication of the two wellhead platform topsides (WHP), each weighing 3,200 metric tonnes, for the Mafumeira Sul development. This contract represents a major project for the yard and heralded a major step up in its technical capabilities. Porto Amboim Estaleiros Navais Ltda known as Paenal yard is a joint venture partnership between national oil company Sonangol, SBM Offshore and DSME with holdings of 40%, 30% and 30% respectively and provides an ideal base for the oil industry s exploration and production offshore West Africa. Paenal s scope for Malfumeira Sui represents the heaviest and most complex well head platform topsides ever fabricated in Angola A first for Angola After less than two years of intensive fabrication, the first topside (MSP WHP Centro) was successfully loaded onto a barge and moved to the Mafumeira Sul field in Block 0 offshore Angola. The financial value to Paenal of the Mafumeira Sul Project is significant. We have created employment and also indirect jobs in the area, through the outsourcing of many services. In addition, it allowed for further training of our local resources in cost control and cost engineering. Due to complexity of this project, it was necessary to increase the knowledge of our National Angolan employees for the industry s latest technology, which has added to our know-how for future projects, says Maria de Castro, Finance Manager, Paenal. CABGOC s Mafumeira Sul facility includes a complex of five platforms (Centro WHP, Sul WHP, the Process Production Platform, Flare Platform, and the Living Quarter Platform). The project offshore Angola is located 15 miles (24 km) offshore Cabinda province in 60m of water, and is the second stage of development of the Mafumeira Field. The project highlights a continued effort by CABGOC to expand the capabilities of Angolan fabrication yards, increase the knowledge of Angolan engineers and add skilled employees to the Angolan workforce. Mafumeira Sul is expected to produce its first oil in 2016 and will build towards a peak total daily production of 110,000 barrels of crude oil and 10,000 barrels of liquefied petroleum gas. Associated gas will be commercialised through the Angola Liquefied Natural Gas (ALNG) plant in Soyo, Angola. As Cesar Guerra, the General Manager of Paenal Shipyard, remarks: Paenal has demonstrated its capabilities to execute complex projects to date and each project is a further step up on the experience curve. The Mafumeira Sul Project represents a challenge due to the inherent difficulties of projects of this size. It is on track to be completed with excellent safety records as per our commitment with the Incident Injury Free (IIF) Legacy. Paenal is building a reputation as a world-class fabrication and integration yard. In 2014 we completed on schedule the scope for ENI s N Goma FPSO. Paenal has proven that the quality of its works meets the level expected from a well-established international yard. SBM Offshore SBM Offshore / Currents / Currents 10 10

11 Paenal Landmark Paenal yard is the first fabrication and integration facility in Angola and now a landmark for international oil and gas operators in West Africa. The yard, whose facilities include the heavy lift installation crane and a 490-metre long purpose built quayside, is capable of producing up to 10,000 tonnes of modules a year, representing approximately two million man-hours. N Goma FPSO at Paenal Formerly FPSO Xikomba, FPSO N Goma was disconnected from Angola Block 15 in 2011 where it had operated for eight years for ExxonMobil. SBM converted the FPSO for Eni with scope undertaken in Singapore and Angola it was renamed N Goma, and it is now being operated for Eni by OPS, a joint venture between Sonangol (50%) and SBM Offshore (50%). The relocated N Goma FPSO started producing on the Eni-operated Block 15/06 West Hub in Angolan waters in November The FPSO has a total oil processing capacity of 100,000 bpd, a gas handling capacity of 115 MMSCF per day and a water injection capacity of 120,000 bpd. N Goma is an example of the skills and experience SBM has in handling the complexities involved in upgrading these vessels for operations on new fields. Paenal allowed SBM to ensure the Angolan local content for the project. Paenal fabricated two of N Goma s modules and integrated them into the vessel to complete the upgrade. After sailaway from Paenal, N Goma was hooked up at the Eni-operated field, offshore Angola; the hook up of the FPSO s nine mooring legs was carried out by SBM s newest installation vessel, the SBM Installer, which also installed two seawater lift hoses. The FPSO is owned by the company Sonasing (shareholders: SBM Offshore, Sonangol and Angolan Offshore Services). Relocation, relocation, relocation The N Goma FPSO is indicative of a growing trend for FPSO relocations, undertaken following the completion of the previous assignment. Since the industry s first-ever FPSO relocation over twenty years ago (SBM s FPSO II relocated from the Cadlao field to the West Linapacan field, offshore Philippines in 1991), SBM has become the foremost authority on relocations, having developed a unique understanding of the key factors involved in this type of project and the skills and methodologies required. There are about twenty candidates for relocation over the next few years, says Senior Vice President Sales SBM Offshore Angola Jean-Philippe Rodrigues. Relocation is managed in a similar way to a typical conversion. The key to success starts with the comprehensive surveying of the facility, an accurate assessment of the refurbishment scope, a well defined yard scheduling and cost estimates, along with the implementation of parallel works, such as new topsides, at a conversion yard for optimum preparation before FPSO arrival. The FPSO, needs to be tailored to suit the new field, environmental conditions and any new rules or regulations.the extent of the modifications needed to move to a new field is entirely dependent on the gap between the new environmental conditions, reservoir fluid properties and expected production rates, and the original vessel Basis of Design. If the gap is small, a quick relocation with minimal work is theoretically possible. However, experience shows that this is unusual, and in most cases a visit to a shipyard for upgrade works is becoming the norm. SBM Offshore / Currents 11

12 The module lifting campaign for FPSO Cidade de Maricá underway at Brasa shipyard in Brazil using the Pelicano-1 heavy lift barge crane SBM Offshore / Currents 12

13 SBM s G3 FPSO design proves a game changer for pre-salt field // ISSUE 11 // OCTOBER 2015 The third in the series of four pre-salt FPSOs for Petrobras is moving closer to delivery, having berthed safely at the Niteroi-Rio based yard in July this year. FPSO Cidade de Maricá had arrived in Brazilian waters mid-june, following her 10,625 nautical miles voyage from China. FPSO Cidade de Maricá is the sister to FPSO Cidade de Saquarema, both carbon-copies of the blueprint FPSO Cidade de Ilhabela, the mother ship, which sailed from Brasa to commence production in November Capable of operating in water depths down to 2,140m, Ilhabela is the deepest in SBM s operating fleet and has the largest production capacity at 150,000 bpd of oil. The sister FPSOs, due to be delivered in Q1 2016, will be moored at similar water depths to Ilhabela. Both Maricá and Saquarema are also benefitting from the technological expertise and experience that SBM Lula pre-salt province Both FPSOs Cidade de Maricá and Cidade de Saquarema are destined for the Lula field in the pre-salt province offshore Brazil. BM-S-11 block is under concession to a consortium comprised of PETROBRAS (65%), BG E&P Brasil Ltda. (25%), and Petrogal Brasil S.A. (10%). The FPSOs will be owned and operated by a Joint Venture comprised of affiliated companies of SBM Offshore, Mitsubishi Corporation, Nippon Yusen Kabushiki Kaisha, and Queiroz Galvão Óleo e Gás S.A. in which SBM Offshore shareholding will be 56%. SBM Offshore is in charge of the construction of both FPSOs and offshore operations and maintenance. FPSO Cidade de Maricá quayside at the CXG China yard has acquired during the successful completion of FPSO Cidade de Paraty the first of the four FPSOs for pre-salt FPSOs offshore Brazil. Paraty has marked two years of steady operations having achieved first oil in June The FPSO continues to ramp-up oil production on the Lula Nordeste field offshore Brazil, located in block BM-S-11 in the Santos basin in a water depth of 2,100 metres, 300 km offshore. Its topside facilities are just under 14,000 tonnes in weight and have the requisite processing equipment for 120,000 bpd of oil, and 5,000,000 Sm³/d of gas, with complete compression and carbon dioxide removal facilities as well as a water injection facility. Brasa SBM Offshore Chief Operating Officer Philippe Barril commented: We are happy with the progress to date on Maricá and we look forward to the delivery of the FPSO to our client once the Brasa scope is completed. We expect her to follow in the footsteps of her mother ship FPSO Cidade de Ilhabela, which has been successfully producing offshore Brazil for ten months and is an example of the world-class standards to which SBM aspires. The arrival of FPSO Cidade de Maricá to Brasa represents a positive milestone for SBM Offshore and a further step on the road to on schedule delivery. According to Project Director John Perkins: It demonstrates SBM s effective global project management for conversions, which is being jointly conducted from our Regional Centres in Europe and Brazil. Conversion work on the hull and some module integration was completed in China before Maricá set sail in April 2015 for Brazil to complete the final integration of the vessel s modules fabricated in the SBM Offshore / Currents 13

14 Brasa yard undertook over 2 Million manhours LTI free for the fabrication of the modules for the twin FPSOs. As undertaken for the Cidade de Ilhabela project, all Brasa modules were transported across the channel in Niteroi by BSL s Pelicano 1 crane and lifted onto the FPSO for the final integration phase Rio-based yard. Cidade de Maricá is the second FPSO to moor and be integrated at Brasa shipyard since it opened in Project Manager Martijn Kleijn said: Progress has been steady. Integration of the hull and topsides is taking place at Brasa, the joint venture partnership between SBM and Synergy, while module lifting was undertaken using the yard s Pelicano-1 barge crane. Additional modules were constructed and delivered by EBSE, a Rio yard that SBM works closely with as part of its development of local content solutions. G3 design All four pre-salt FPSOs are of a design that SBM calls Generation 3 (G3), which represents a major step-change in the scale and complexity of FPSO projects to meet the industry s advanced offshore processing needs to develop the pre-salt production projects. The average installed shaft power of around 100 MW for Generation 2 units has been more than doubled for G3 vessels. Although Paraty has a lower topsides weight than the others in the series, the vessel s processing capacity is just as complex in order to cater to the characteristics of the pre-salt fields. These fields contain vast hydrocarbon reserves that have been buried deep beneath a thick blanket of overlying salt. What particularly marks out the G3 design as an FPSO game changer is the increase in production rates and the sophistication of its gas processing and compression technology. Paraty has an oil production capacity of 120,000 bpd while the latest G3 FPSOs can each produce 25% more, which represents the highest level in the SBM fleet. Operations offshore As well as having the core technology to build these vessels, SBM operates them. All four FPSOs are on 20-year lease and operate contracts. The fleet operating division of SBM has gained significant experience with Paraty and Ilhabela. The skill sets of the operations teams offshore Brazil 80% Brazilian - now include the requisite know-how in advanced separation, treatment and compression technologies on deck. In addition the ultra-deep waters and the very high well pressures of these pre-salt projects add a significant challenge. Standardisation SBM has improved production efficiency and saved time on the average schedule of 36 months to fast-track the new sister FPSOs thanks to the carbon-copy strategy based on Ilhabela, the mother ship. Standardisation a much discussed topic by the industry in the current climate is embedded in SBM s quartet of FPSOs for Petrobras and gives SBM an advantage in this domain. The conversions of Maricá and Saquarema are running almost in parallel, virtually a single project. This demonstrates SBM s effective global project management for their conversion, which is being jointly conducted from our Regional Centres in Europe and Brazil. SBM Offshore / Currents 14

15 FPSO Cidade de Paraty topsides During the first half of 2015, the FPSOs operated by SBM Offshore in Brazil produced on average, 369,000 barrels of oil per day from five FPSOs. This volume is equivalent to just over 15% of the total daily volume produced in Brazil. Once FPSOs Cidade de Marica and Saquarema are fully installed and operating, SBM s relevance to Brazilian oil production will grow further. SBM Offshore / Currents 15

16 S3 is an electrically-charged flexible tube filled with pressurised seawater Sea power sees SBM surf towards new wave energy demonstrator SBM Offshore is pressing ahead with the development of a novel wave energy converter (WEC) technology, marking the first step towards harnessing large scale, commercially-viable wave energy. A working prototype could be undergoing sea trials within the next two years. Research into the SBM S3 WEC began in 2006 with a strategic decision to enter the nascent but potentially huge wave energy market. At the time, a number of players from the energy sector were entering the renewables market but had little experience of operating in the harsh offshore environment. So capitalising on its hydrodynamics expertise and the technology inherent to its Calm Buoy concept, SBM set about carving a niche in the offshore renewable energy sector. We started with a general review of existing WEC concepts and began to develop similar technology with power take-off (PTO) based on hydraulic or electro-magnetic direct drive, says SBM Offshore s project engineer Ambroise Wattez. However, during the initial development phase we concluded that conventional WECs all had inherent drawbacks such as a large and heavy structure requiring expensive construction or a narrow-band response that limits their power output. These limitations simply prevent conventional systems from being competitive against other renewable energies, such as offshore wind, regardless of the PTO technology used. A new technology was required. The breakthrough came in 2009, when SBM decided to invest in the development of a radically new WEC technology using electro SBM Offshore / Currents 16

17 active polymer (EAP) to address the limitations of conventional rigid systems and make wave energy harnessing a commercially viable operation. Similar in concept to the Ruben s tube the antiquated physics technique developed by Heinrich Rubens to demonstrate acoustic standing waves the S3 is ostensibly an electrically-charged flexible tube closed at both ends and filled with slightly pressurised seawater. This electro-active rubber snake is then suspended just below the surface of the water, where the wave energy is at its most powerful, to induce local changes in the tube s diameter and absorb the energy. The tube structure and PTO are merged by using EAP generator rings embedded along the body of the WEC to convert ocean wave energy directly into electricity without any moving mechanical parts. The technology has already achieved demonstrable success, when in 2010 at a test basin in Sophia-Antipolis, France, the WEC produced electricity for the first time directly from waves with the use of submerged EAP. Since then, the concept has been further optimised to improve efficiency and reliability of both the WEC tube design and the associated power electronics which are required to harvest the power generated. According to Wattez, due to the simplicity of the technology, which has no mechanical components, routine maintenance has been obviated, resulting in improved efficiency and reduced capital and operational costs. The S3 WEC has the potential to harness 2.5MW of energy per unit, so a wave energy farm containing 50 or 100 units would provide a very commercially attractive alternative to the wind farm. different. The system is very flexible and can be folded or reeled on a carousel. Whilst the WEC is still in the development phase, SBM Offshore is investigating the feasibility of deploying a scale prototype in 2017 and is inviting industry partners to help turn the concept into commercial reality. The WEC product we have developed is ready to be unveiled to the industry in order to attract partners to help us take the concept through the pilot phase and into commercial production. Certainly the biggest market for wave energy // ISSUE 11 // OCTOBER 2015 will be the UK, where 80% of the global wave energy investments will be funnelled over the course of the next ten years, says Wattez Wave energy development is about 25 years behind the advances made in the offshore wind sector, but we believe the market will pick up in the next five to ten years, when the technology will be ready. The market is very promising. It s a much denser energy than wind, is easier to capture and will far exceed the energy per square metre generated from offshore wind farms. Until then, SBM will work to further increase the energy density of the EAP material to improve energy production, rates volumes and fatigue life. The end goal is to deploy a full scale demonstration at sea at a grid-connected test facility. The true potential of this breakthrough is confirmed, and although the WEC is still an R&D project it is already much more than a simple vision. Like all new technologies, the S3 will require significant investments to reach commercial maturity, and key strategic and financial partners are being sought to participate. Wave energy is very much the way of the future, says Wattez. Competing wave energy technologies, would require a fleet of heavy lift ships to assemble, transport and install the units in the field. Our approach is completely Rick van Kessel and Ambroise Wattez (right) the driving force behind the S3 WEC project

18 SBM technology offers cost reduction opportunities Even before the recent drop in oil price from over US$100 per barrel to below $50, SBM Offshore clients were already struggling to get complex deepwater projects sanctioned. In a buoyant market, prices for field developments had escalated to levels that were becoming unsustainable. Compounding the problem is that the latest deepwater discoveries are ever more challenging. Water depths are passing the 3,000 metre barrier; reservoir depths are exceeding 10,000 metres and as a result exceeding the pressure limit of 15,000 psi wellhead equipment. Pre-salt reservoirs may contain high levels of impurities like CO 2 and H 2 S, which need to be removed from the product streams. Frontier areas are more exposed to harsh environments. All of these factors unfortunately tend to make field development even more costly. even further. One example is the ARCA, an Articulated Rod Connecting Arm introduced to provide a new solution for connecting mooring lines to a floating facility. When applied to an FPSO, ARCA allows mooring lines to be easily connected and disconnected without the need for divers, so enabling easy inspection, repair and maintenance. However, since use of the system allows for the movement of mooring line articulations from the turret chain table to the mooring leg, turret and moonpool diameters can be reduced, leading to significant steel weight reductions and consequently reduced project CAPEX. With FPSOs advancing in complexity leading to heavier topsides, SBM is now applying process intensification methods to reverse the trend. By qualifying compact process equipment from selected suppliers SBM can achieve the same (or better) functional performance with more compact facilities. In so doing significant space and weight savings can be made. Moreover, some of these components offer major OPEX savings and with the FPSO design SBM Offshore has increased its R&D spend considerably in an effort to develop components and technologies capable of reducing client costs even further. The reality of current oil prices means that serious cost reductions are essential if deepwater projects are to be revived. Yet while cost reduction opportunities exist in project execution, especially supply chain and construction, there are other ways. One area in which SBM can help lower field development costs is through technology and project specifications. Costs are largely dictated by a combination of a field s specific requirement and project execution strategy but the use of the latest technology can optimise field development, thus reducing costs. SBM Offshore has maintained its R&D spend in an effort to develop components and technologies capable of reducing client costs The Thunder Hawk design avoids the use of costly SLWRS SBM Offshore / Currents 18

19 life often being 25 years, the impact of lowering OPEX costs over the vessel s life span is significant. Two examples of new products offering lower field development costs are the converted LNG FPSO and the MoorSpar. The Industry is now slowly accepting the LNG FPSO as a valuable tool for stranded gas field monetisation. However, most offshore LNG projects under execution today are based on new build hulls, which contrasts with the FPSO business where two thirds of the global FPSO fleet are based on tanker conversions. SBM s TwinHull LNG FPSO has been developed specifically to offer the industry the same advantages that conversions have over new build FPSOs in improving gas field economics lower costs and faster schedules. There is an increasing trend in the development of High Pressure High Temperature (HPHT) fields in ultradeepwater, which favour the use of rigid steel risers over the flexible kind. These can be deployed either as Steel Catenary Risers (SCRs) or as Steel Lazy Wave Risers (SLWR), however, the latter are considerably more expensive to install. To avoid the use of costly SLWRs, SBM has developed the Deep Draft Semi, of which Independence Hub and Thunder Hawk provide exemplary in service references of concept. The newly introduced MoorSpar offers similar cost savings since this system allows disconnectable FPSOs to benefit from use of SCRs by supporting them from a mini spar-type structure and using a yoke mechanism to de-couple the FPSO motions from the MoorSpar. Finally, one crucial factor which is often downplayed in terms of project costs is project specifications. SBM clients usually have to decide from the outset whether they will adopt a prescriptive approach by mandating the application of their engineering SBM s TwinHull LNG FPSO has been developed specifically to offer the industry the same advantages that conversions have over new build FPSOs in improving gas field economics lower costs and faster schedules. standards to the project, or a functional approach, by specifying only the functional requirements (plus key interface data) and allowing the contractor to apply their own in-house engineering standards. Having experienced both approaches over many projects, SBM sees the functional specification approach as offering significant cost and schedule advantages. However, for clients to adopt this approach they must first have confidence in the contractors engineering standards. In such cases SBM s Group Technical Standards have already been accepted by major IOC clients. This together with the continued development of innovative components, systems and products, is making a significant contribution to the industry s quest for lower costs. SBM Offshore / Currents 19

20 // ISSUE 11 // Q The 2015 OTC Spotlight on New Technology award was awarded to Christian Bauduin (centre), SBM s Concept Department Manager and Andrew Newport (right), SBM Monaco Technology Development Director responsible for the innovative ARCA Chain Connector Award-winning ARCA stretches the limits of technical innovation The Articulated Rod Connecting Arm (ARCA) concept is firmly in the industry psyche now that SBM Offshore s novel chain connector has won a prestigious Spotlight on New Technology award; the third year running that SBM has been honored with an OTC prize for pushing the boundaries of technical innovation. The award-winning ARCA, a major breakthrough in the safe installation, inspection and repair of mooring lines, is already being considered for a number of new FPSO projects due to the cost savings and enhanced functionality which the patented system delivers. Andrew Newport, SBM Offshore s Technology director in Monaco, says: ARCA is a very costeffective way to safely connect and disconnect mooring chains on FPSOs. Based on industry requirements, and working in collaboration with our customers, we have been able to develop a system that not only reduces operational costs but can also increase design life. There is no other chain connector on the market that provides these benefits and avoids hazardous diving operations. The ARCA system can also help to reduce the capital cost of the overall turret system, since the turret diameter may be reduced as the articulations are removed from the chain table. These articulations are placed in the removable section of the connector, allowing them to be brought to the surface for inspections, so improving the reliability of the system. Inspection of mooring lines and connectors is a big issue for operators but the diverless ARCA system mitigates the risks involved, says Newport. There are also significant commercial advantages, particularly in relation to drydocking work and turret installations as only the guide tube of the ARCA is integrated into the turret chain table. Therefore it does not protrude below the chain table in the way conventional chain stoppers do. This removes restrictions on the clearance needed below the FPSO s keel, when in drydock or at quayside. Fundamentally, the ARCA system allows us to significantly increase the design life of the mooring system to 40, even 50 years. SBM s product account manager Christian Borgen says: ARCA is a prime example of how SBM stretches the limits of technical innovation. We are the only company with this type of chain connector solution. ARCA has completed full scale prototype testing with 154 mm chain and 200 tonne pretension and is now being offered to clients for future projects. The ARCA chain connector avoids hazardous diving operations SBM Offshore / Currents 20

21 ARCA won an OTC award in 2015 SBM Offshore / Currents 21

22 SBM creates new hub for Europe In light of the volatile oil price, SBM s preparation and reorganisation measures the last two years are bearing fruit as we tackle the challenge head-on. In August 2015 SBM implemented a key element of its strategy to further leverage its competencies and proximity to an expanding client base. Merging the two Regional Centres (RC) in Monaco and Schiedam into a single Centre for Europe will serve to build on the strengths of each area of excellence, to create synergies as well as optimise project execution. Headed by Managing Director Giuseppe Stani, RC Europe will be responsible for business development in the Europe and Africa region, EPCI and the support of four of SBM s Product Lines Turret Mooring Systems, Swivel Mechanical Parts, Offshore Contracting and Terminals (with Imodco the separate entity created last year) while also providing support to the LNG FPSO Product Line, traditionally Schiedam s area of excellence. SBM s global presence is based on the solid foundation of its Regional Centres, which are key to our success in terms of our technological areas of excellence as well as project execution. This step to consolidate leverages our know-how and capabilities while avoiding duplication of work and creating new efficiencies all steps in our journey towards offering our clients cost-optimization and timely solutions. Most importantly our unique vision and proximity to where our clients are based will mean a one-stop-shop for our European and African clients, further improving their experience with SBM, says Giuseppe Stani, SBM Offshore Managing Director RC Europe. The creation of one dynamic Regional Centre in Europe has been in progress for the past two years with symbiotic collaboration between the Monaco and Schiedam centres with the project management of the FPSOs Cidade de Maricá and Cidade de Saquarema being co-managed. Since award of the FPSO contracts in July 2013, SBM s most experienced personnel are working steadily to ensure the projects stays on schedule and are completed to the highest standards of quality and safety. The excellent work by the Monaco and Schiedam teams also extends to include our Brazilian Regional Centre since the FPSO Cidade de Maricá arrived at Brasa, SBM s Rio-based Joint Venture shipyard. The experience being gained on this project has led to an infrastructure being put in place to ensure the smooth evolution of this European-African Regional Centre under which the Monaco and Schiedam offices join forces under one management team while remaining physically present in their markets. The newly formed European RC will strengthen the service SBM offers to clients that are based and operate in Europe. A dedicated Business Development team straddling both offices in Monaco and Schiedam will ensure flexibility and the availability of our in-house talent combined with more efficient use of sub-contractors when needed for new projects as they emerge. In addition to servicing established clients such as Shell, Total, Statoil, BP, Eni and others, the new Regional Centre will also target and develop business opportunities in Africa by liaising with clients who have a base on the continent as well as supporting customers who are operating offshore from the North Sea, the Mediterranean to Africa. SBM Offshore / Currents 22

23 SBM Offshore establishes new corporate headquarters in Amsterdam SBM Offshore Amsterdam B.V. Evert van de Beekstraat CL Schiphol Telephone +31 (0)

24 Disclaimer Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements based on management s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements. SBM Offshore NV does not intend, and does not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances. ISSUE 11 // OCTOBER 2015 The sole intention of this brochure is to share general information.