Brazil is leading the recovery in the South America offshore industry, triggered by a conflux of agreeable circumstances
A happy combination of rising oil prices, growing demand for gasoline and more enlightened economics is triggering a spurt in offshore exploration for oil and gas across much of South America.
And nowhere is there more action than in Brazilian waters. The vast and ultra-deep hydrocarbon reserves off the country’s coast are attracting the latest and greatest equipment in the offshore supply fleet, from giant floating production storage and offloading vessels (FPSOs) to high-speed ferries for platform crews.
With tens of billions of barrels of crude lying buried beneath the ocean floor, the commercially valuable light oil in Brazil’s so-called 'pre-salt deposits' are typically being recovered by a proven combination of FPSOs twinned with shuttle tankers, that ferry the oil and gas to terminals onshore.
Such are the potential rewards that state-owned oil group Petrobras is throwing its entire offshore supply fleet at the hydrocarbon reserves: “We hire drilling rigs, production platforms, vessels and submarines with features that set the entire energy industry chain into motion,” said the company.
But that statement represents a turnaround by Petrobras, which until last year insisted on taking a stake in all oil fields in Brazilian waters, but has come to recognise that it can not develop the fields all by itself. Although Petrobras has retained the right of first refusal, it has invited international investment. That change of attitude has sparked the latest boom in the offshore supply industry, which has been waiting in the wings since the pre-salt fields were discovered a decade ago.
It was Brazil’s minister of mines and energy Fernando Coelho Filho who opened the door for the foreign exploration industry. “By creating an environment favourable to investment, foreign businesses are again starting to think of Brazil as an option,” he said late last year.
That observation could also be made of Mexico. After a three-year decline, oil consumption began to increase once again in late 2017 and does not look like stopping anytime soon. Mexico is already the world’s fourth-largest consumer of gasoline, according to the country’s Energy Secretariat. ExxonMobil predicts that Mexico’s demand for gasoline will jump by 40% in the next 25 years.
And on the back of the growing appetite for oil in Mexico, oil majors are scrambling to meet demand.
Floaters in demand
The current preference is for FPSOs, or 'floaters'. Compared with fixed platforms, one of the great attractions of FPSOs is that they can be moved from one field to another according to need. Furthermore, the all-purpose FPSO does not need a lot of support ships and can rely on a shuttle system of tankers. It is also far easier and cheaper to convert a vessel into a floater than it is to build than a brand-new vessel.
“FPSO construction is cost-efficient as it’s usually converted from an existing vessel,” explained Man Diesel & Turbo head of MAN PrimeServ sales and contracts in Brazil Valdir Simonetti. “And the FPSO can also store the produced oil, reducing the usage of support vessels.”
The renewal of activity in offshore South America has triggered a spate of conversions. Practically every new discovery off Brazil, for example, has led to another commission for Japan’s Modec group. A division of Mitsui Engineering & Shipbuilding, Modec has turned out 20 floaters currently in operation around the world, no less than nine of them in Brazilian waters. Modec expects to launch another three of these giant vessels in 2018.
Marvels of rugged technology, the bigger FPSOs such as the Cidade de Mangaratiba (City of Mangaratiba) anchored off Brazil, are distinguished by centrifugal and screw compressors that have two main functions: first, they help pump hydrocarbons from the vessel to the shore via pipelines; and second, they inject natural gas and CO2 into the wells to boost pressure and increase oil production. The average production of one of these floaters is as much as 150,000 barrels a day.
Because FPSOs operate in challenging environments, they require constant servicing from onshore-based teams to keep them up and running. Operators of FPSOs say that downtime can easily cost US$1M a day. The reliable functioning of Cidade de Mangaratiba, for example, relies on MAN PrimeServ based at a hub in Petropolis, about 70 km north-east of Rio de Janeiro. Technicians there service not only MAN’s own equipment, but that of other manufacturers whose technology is used on the vessel.
“[We maintain] the compressors and miscellaneous rotating equipment from third parties on behalf of Modec,” explains MAN PrimeServ managing director Jens Hueren. “Our presence means that repairs are carried out locally, fast and without long transport times from overseas. That results in huge savings.”
One of the beneficiaries of the upsurge in activity in South America is Italy’s Saipem, a giant of the OSV industry. Late last year Saipem won a contract in the Gulf of Mexico that will involve the transportation and installation of a compression platform for local group, Dragados Offshore de Mexico. To get the job done, the group will deploy one of its semi-submersibles, the Saipem 7000, one of the biggest crane vessels in the world.
Saipem has also been involved in a world-first in Brazilian waters, where technical feats are achieved on a regular basis. Two years ago, in 2,200 m waters lying 300 km off the coast in the Santos Basin, the group deployed a field development ship with a 1,000-tonne capacity main crane to install two free-standing hybrid risers (FHRS), effectively vertical steel sections supported by a buoyancy can at the top end. In an intricate operation, the risers were lowered into the water and floated, using buoyancy tanks that were righted through the use of controlled flooding.
Not only were records set for the heaviest, biggest and deepest-ever installation of risers, but the buoyancy tank was also the longest and heaviest ever deployed.
There and back
To operate these immense machines, crews must be ferried to and fro in round trips of up to 600 km . Los Angeles-based Seacor Marine has deployed in Mexico one of its fast support vessels (FSVs) that can average up to 40 knots.
“With offshore oil and gas production pushing into deeper water and further from shore bases, we designed our latest series of 'comfort-class' FSVs,” explained Seacor Marine chief executive John Gellert. “Our goal was to offer a cost-effective alternative to helicopters and still retain flexibility to move vital cargo.”
Gone are the days of bucketing out to platforms while bouncing up and down on wooden seats. These FSVs boast airline-style first-class seats, full internet connectivity, LED lighting, and various forms of entertainment to keep the crew amused. Creature comforts are clearly popular – Seacor has four more of its latest FSVs under construction.
Furthermore, in a joint venture in Mexico with the Mexmar group, Seacor Marine operates a fleet of four platform supply vessels. All four are being upgraded with energy-reducing, environment-improving management systems that were developed by Norway’s Kongsberg.
As elsewhere, the South America oil and gas industry finds itself operating under tougher environmental rules. “With the reduction of environmental impact fast becoming a key criteria for our clients, it’s important that we are able to meet the changing needs in the market,” pointed out Seacor Marine manager of engineering Tim Clerc. “We will soon have four vessels operating on the most advanced hybrid powertrain available.”
In the pursuit of hydrocarbons, every kind of technology is being called into action. “Brazil’s pre-salt acreage and mature offshore basins offer lucrative exploration opportunities for 2018,” announced seismic survey group PGS in April. A pioneer in the provision of images and 3D data about the sub-surface lying below the ocean floor, PGS uses its patented GeoStreamer system - algorithm-based depth imaging - to peer into the structurally complex salt geometries in these deep waters.
The PGS-owned, fat-beamed Ramform Tethys, a Titan-class acquisition vessel, is now chasing data in the Sergipe-Alagoas basin, lying 85 km off the coast. That data will eventually help oil companies decide where to move their FPSOs and drilling rigs so they can get to work.
“These datasets provide a superior basis for exploration decisions,” PGS explained. “In addition, they can be used as a baseline survey for future 4D studies, making this a cost-effective solution for exploration, evaluation, field development and production monitoring.”
Seismic vessels such as these are a special breed. Another of PGS’s dedicated vessels, the Ramform Atlas, boasts a 70 m-wide back deck that houses what the company claims to be the industry’s largest seismic spread, as well as work boats to maintain it.
Under the water are three variable-pitch propellers that deliver 1.8 megawatts of power, enough to tow a wide spread of recording equipment. The two stern-launched work boats allow the crew to maintain the seismic streamers even in marginal weather; furthermore, maintenance can be conducted while under way.
The vessel in action in South America right now, the Ramform Tethys, is the flagship of the PGS fleet. Launched in 2016, it boasts twin, mutually redundant engine rooms giving a capacity of 26.4 megawatts, driving three 6,000 kw-controlled pitch propellers. On the back deck are located 24 streamer reels, 16 abreast, with a further eight lined up in a second row. As PGS explained: “This permits flexibility and efficient acquisition of high-volume exploration 3D, or high-density 3D or 4D, and anything in between.”
As South American nations continue to invest heavily in their energy networks, the prospects improve for the offshore support industry. When Mexico’s new fuel terminal at the Port of Lazaro on its Pacific Coast opens for business in early 2020, the government hopes it will become an important distribution hub right down the coast, and even into Latin America. The idea is that smaller vessels will distribute the imported fuel from the port, which is Mexico’s deepest, to shallower ports.
“Lazaro Cardenas has a great capacity to become a distribution centre for other ports,” the port’s planning director Jaime Ramirez told energy consultancy Platts earlier this year.
The port could also become a haven for the offshore supply industry. It is one of the few harbours in Mexico lying within a special economic zone, meaning there are tax and regulatory advantages for new investments such as onshore facilities.
Other ports have the same idea. The main port along Mexico’s east coast, the Port of Veracruz, has already awarded a tender for the construction and operation of a fuel marine terminal expected to open in the second half of 2018.
With Brazil and Mexico leading the way, it is certain that South America will become one of the busiest regions in the world for the offshore supply industry.