FPSO Research Forum October 16, 2002 Santiago de Compostella, Spain

1. Report out from FPSO Global Workshop24-25 September, 2002-Houstonby Johan Wichers – MARIN USA Inc. FPSO Research Forum October 16, 2002 Santiago de Compostella, Spain

2. Who organized the FPSO-Global-Workshop and Why? • Offshore Operators’ Committee • API Shuttle Vessel Task Force • DeepStar • FPSO Research Forum • MMS • USCG • SPE FPSO Research Forum

3. Who organized the FPSO-Global-Workshop and Why? In deepwater regions of the GoM large oil fields are present. FPSOs seem to be the economic solution To “identify and clear” potential roadblocks for FPSOs to be installed in the deepwater part of the GoM Discussions with all players: the oil companies, operators, contractors, research institutes, government, class societies FPSO Research Forum

4. FPSO Research Forum Courtesy by MMS

5. FPSO Research Forum Courtesy by MMS

6. FPSO Research Forum Courtesy by MMS

7. FPSO Research Forum Courtesy by MMS

8. FPSO Research Forum Courtesy by MMS

9. FPSO Research Forum Courtesy by MMS

10. FPSO Global Workshop 24-25 September 43 112 10 23 188 155 525 IBC’s OPT USA2002 16-17 September 2 44 - 36 72 46 1200 Who attended FPSO Global Workshop IBC’s FPS USA2002 17-19 June 2 44 - 21 67 46 1200 Oil company people Other categories Oil company speakers Other speakers Total in room Estimated paid attendees Ticker price US $ FPSO Research Forum

11. DAY-ONE 1)The Latest in the GoM Regulatory Framework for FPSOs, What It Really Means Today 2)Typical FPSO Operators’ Requirements Outside GoM Oil Co. Owner & User of FPSOs Contractor Owner of FPSOs 3)Typical Operators’ Requirements for FPSOs for GoM DAY-TWO 4)Town Hall Meeting: Brief Presentations on Future Needs by Attendees 5)Where do the shuttle vessels come from? What requirements apply? How can they compete with established pipeline networks? 6)Time for the Practical Stuff: How do we now obtain one of these FPSOs for GoM? 7) Conclusions from Industry Leaders in Sponsoring Organizations Or in more detail: The 2 days program FPSO Research Forum

12. DAY-ONE - morning 1)The Latest in the GoM Regulatory Framework for FPSOs, What It Really Means Today Jim Grant – MMS: Regulatory review for FPSOs in the GoM Mark Prescott – USCG: FPSOs in the GoM? Are we there yet? FPSO Research Forum

13. DAY-ONE - morning 2)Typical FPSO Operators’ Requirements Outside GoM •  Oil Co. Owner & User of FPSOs Dave Edwards- Shell: Succesful FPSO projects – What does it takes? Marco Maddalena – Petrobras: Petrobras requirements for FPSOs Marc Buezlow – ChevronTexaco: CTX has interest in 19 FPSOs and FSOs Ben Thurmond – BP: FPSO requirements • Contractor Owner of FPSOs John Lane – Modec: Typical Operator Requirements outside the GoM John Spittal – PGS: The FPSO role in the GoM Allan Millmaker – Bluewater: An Owner’s Perspective Rob Mountjoy – SBMImodco; Experience of SBM Steve Balint – Shell and Johan Wichers-MARIN: Top Three Issues for FPSO’s FPSO Research Forum

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15. DAY-ONE -Afternoon 3)Typical Operators’ Requirements for FPSOs for GoM Rick Meyer & Mitch Winkler - Shell EP Company: Economics Issues for FPSOs in GoM: What’s Different? Carl-Arne Carlsen - DNV: Typical Operators’ Performance Expectations for FPSOs in the GoM Wanda Parker - Deepstar: FPSO operating and safety requirements Tricia Clark - API Shuttle Vessel Task Force: Expected Operating Procedures for FPSO / Shuttle Vessel Operations Bill Sember-ABS: GoM’s Top Three Issues for FPSOs for GoM FPSO Research Forum

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19. One of the main conclusions of Day-one: FPSO Integrity FPSOs have to stay their life time at location and have to operate according to the operators expectations – large field - large output – design failures may lead to large financial losses FPSO Research Forum

20. DAY-TWO - morning 4) Town Hall Meeting: Brief Presentations on Future Needs by Attendees Ian Whitby-Intec Engineering: Deepwater pipeline or shuttle tanker? Greg Smith-MMS: Royalties in-kind, economics and transportation Bill Daughdrill - Ecology&Environment Inc.: Environment & FPSOs-are we ready? Arun Duggal – FMC SOFEC : Is DP an option for deepwater FPSOs ? John Leitch – KBR: Contracting Strategy in GoM FPSO Research Forum

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24. DAY-TWO - morning 5) Where do the shuttle vessels come from? What requirements apply?How can they compete with established pipeline networks? Skip Ward-OTRC: Comparative Risk Analysis of Deepwater Production Systems Terry Stock-Callon Petroleum Company: Pipeline Infrastructure, Economics, Risks for GoM v. Shuttle Tankers Stein Rynning Navion ASA: Adaptation of Existing North Sea Shuttle Tankers and Practices to GoM John Ellis Skaugen PetroTrans Inc. : Commonality of GoM Lightering experience with GoM shuttling Chuck Steube, Seahorse Shuttling & Technology LLC : A New Venture in the U.S. Market FPSO Research Forum

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27. DAY-TWO -Afternoon 6) Time for the Practical Stuff: How do we now obtain one of these FPSOs for GoM? Mark Prescot-USCG: FPSO’s in the GoM, Getting started Marco Maddalena-Petrobras: Petrobras viewpoint on the process of acquiring a FPSO Per Bergstol-Fearnley Offshore: The Commercial Side - lease or buy an FPSO? Existing or Newbuild? Rob Mountjoy-SBMImodco: The FPSO Contractor Solution Jan Wagner-Fluor Corporation: Next generation FPSO: The engineering and construction contractor solution. 7) Conclusions from Industry Leaders in Sponsoring Organizations FPSO Research Forum

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30. Some conclusions • FPSOs have to stay their life time at location (~20 years) and have to operate according to the operators expectations. The fields are much larger than the fields on the GoM shelf. The through put is large, design failures may lead to large financial losses • Outside and inside the GoM the technical problems are nearly the same – Loop-eddies, hurricanes, deepwater. We have typhoons in South-East Asia, we have large current speeds in South-East Asia (soliton current) and North of Shetland (Gulfstream return), we have deepwater in West Africa. • The MMS may allow limited re-injection of natural gas from FPSOs in the Gulf of Mexico as long as the gas is eventually recovered. For operators, that flexibility may remove a major stumbling block that had threatened to delay the entry of FPSOs into the Gulf of Mexico. FPSO Research Forum

31. Some conclusions (con’d) 4) A "serious shift in industry sentiment toward using FPSOs in the last 12 months" is noticed. However, there is still the problem of economically building Jones Act-compliant shuttle tankers to offload from Gulf-based FPSOs.Some industry sources hoped that waivers might be granted by US Customs, which enforces the Jones Act, for foreign-flagged and foreign-crewed tankers to operate temporarily in US waters while an entirely new fleet of US-flagged, US-built tankers is assembled. 5) Another option that may be gaining ground to become the first Gulf FPSO is simply to move an existing FPSO from elsewhere to the Gulf and have it produce both oil and gas directly into a pipeline, doing away with the need for storage or offloading.Shell had considered such a scenario before it opted for a newbuild semi-submersible production platform to develop its sprawling deep-water Na Kika complex in the Gulf. FPSO Research Forum

32. Some conclusions (con’d) 6) Personnel issues continue to press operators. Operational experience/training/competency issues will be dramatically different than classic GoM shelf fixed platform facilities. 7) Early dialog between developer and agency can provide valuable benefits and reductions of potential risk to schedule. To access please go to www.fpso-global-workshop.com/presentations.html User Name: bluewiretech\fpso Password: workshop FPSO Research Forum