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Italian Energy Firm Starts Oil Exploration in Barents Sea with Largest FPSO Vessel

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Published on : Mar 17, 2016

Italian energy company Eni has the largest FPSO vessel across the globe. The firm has started oil production at the Goliat field in the Barents Sea off the coast of Norway with the help of this vessel. The new FPSO unit has a capacity of 1 mn barrels of oil and was built to face the environmental and technical challenges across the Arctic sea. The Goliat field is expected to contain around 180 million barrels of oil. Production will take place through a subsea system consisting of 22 wells. 17 of these wells have been already completed. 

In the global FPSO market, other players are expected to follow the footsteps of Eni soon and build FPSO vessels with larger capacities. In the near future, the demand for building such large FPSO vessels will surge with extensive deep sea oil exploration.

Why Converted FPSO Vessels are Preferred over New FPSO Units?

The ever growing demand for oil has pushed the exploration of deep water oil reserves as the existing onshore oil fields are rapidly depleting. In the past six years, about 50% of the offshore discoveries of oil reserves have been in deep water and ultra-deepwater. All these factors have positively impacted the growth of the global FPSO market. However, the FPSO industry is capital intensive in nature. Building a new FPSO units costs around US$2.5-3 bn. Further, testing, operation, and deployment costs add up to the total investment in a FPSO vessel. High labour cost is also expected to negatively affect the growth of the market in the coming years.

It has been observed that converted FPSO units are being preferred over newly built FPSO vessels. Hence, the global FPSO market has an opportunity to grow with the rising demand for conversion of oil tankers into a FPSO vessel. The FPSO manufacturers are focussing on acquiring former oil tankers and converting them into advanced FPSO vessels.