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Transcript of BW OFFSHORE Ltd. - Innovasjon · PDF fileBW OFFSHORE Ltd. Shipowners ... FPSO in the upstream...
BW OFFSHORE Ltd.Shipowners’ Experience and
Requirements in Procurement
and Building process
By Carl K. Arnet, March 2014
Three numbers to define BW Offshore
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99.0%
FPSOs + 1 FSO
700,000 boe/day
uptime
16top tier world-wide
“like a large independent”
2013 average
Global footprint
Crew centers
Offices
UnitsSendje Berge
Yùum K’ak’Náab
Belokamenka
Petroleo NautipaAzuriteAbo
Espoir Ivoirien
Cidade de São
Mateus
Polvo
Umuroa
Berge Helene
BW Cidade de Sáo
Vicente
BW Pioneer
BW Athena
BW Joko Tole
* Operation & Maintenance
P-63*
Peregrino*
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Operational highlights – 2013
■ Class-leading HSSEQ performance
− Lost time injuries (LTI*) of 0.23
■ Stable operations
− Uptime of 99.0%
■ EBITDA of USD 447.4 million for 2013
■ First oil on FPSO P-63 (Papa Terra)
− Project completed
■ Signed extension contract for three units
− Abo
− Sendje Berge
− Polvo
■ Commenced marketing of FPSO Azurite for new projects
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Uptime
* Injuries per million man-hours
4
0
50
100
150Reported One-offs
EBITDAUSD million
90%
92%
94%
96%
98%
100%
Orderbook
■ Orderbook of USD 6.9 billion as of 31
December 2013
− Whereof USD 3.3 billion are firm contracts
− 7x revenue (2013)
■ Long term lease contracts with solid
counterparties
− Visible and sustainable revenue
− Diversified client base
■ Portfolio with solid EBITDA-margins
− 2013 EBITDA margin of 46%
March 2014
Total orderbook and clients
28%
37%
35%
NOC E&P Petrobras
5
USD
6.9billion
WHAT IS AN FPSO?
FPSO in the upstream value chain
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SEISMIC DRILLING DEVELOPMENT PRODUCTION
BUSINESS
DEVELOPMENT
CONTRACT
ENGINEERING
PROCUREMENT
CONSTRUCTION
INSTALLATION
COMMISSIONING
PRODUCTION DE-
COMMISSIONING
FPSO: Floating Production Storage and Offloading
The FPSO is an “oil platform”
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WELL FLUID
OIL, GAS AND WATER SEPARATION
GAS COMPRESSION
OIL
STORAGE
MEETERING
OFFLOADING
GAS
INJECTION/EXPORT
WATER INJECTION
Turret &
swivel stack
Risers and umbilicals
Mooring lines
Flare tower
Helideck
AccommodationHeating medium
Power generation
Gas compression
Offloading hoseFiscal metering
Process plant
Storage
Switchgear room
BUILD PROCESS
FPSO project cycle
■ Tender Phase
− Front End Engineering & Design (FEED)
− Bid major procurement items & sub contracts
− Cost & Schedule Estimate
− Contract negotiations with client
■ Execution Phase
− Detailed Engineering
− Major Procurement and Sub-contracting
− Build New Hull or Convert existing, Build Topsides, & Build Single Point Mooring (Turret)
− Integrate & Pre-commission
− Pre-Operations, transport to site, & installation
■ Operations
− Commission
− Operate Long term
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FEED,
BUDGET &
BID
ENGINEER, BUILD OR CONVERT
HULL
ENGINEER & BUILD TOPSIDES
TRANSPORT
& INSTALL
COMMISSION &
OPERATE
INTEGRATE
HULL, TOPSIDES
& SPM
Hull: new vs. converted
NEW:■ New! Long Life.
■ Design exactly what you want
■ More predictable
But
■ Cost & Schedule “floor”
■ Subject to shipyard market
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USED:■ Not new! Lifecycle risk.
■ Compromised Design
■ Less predictable & often more complex
But
■ Can be cheap and quick
■ Subject to hull availability
Topsides: E+P+C vs. EPC
E+P+C:■ Manage each component yourself
■ Manage your core competence
■ Need substantial resources & competence
■ Keep much of the risk in house
But
■ Keep the margin and the risk/reward in house.
■ Build competitive competence
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EPC:■ Turnkey to others
■ Rely on other parties for core competence.
■ Need only supervision
■ Shed the risk
But
■ Margin & risk/reward is captured by others
■ Others keep building competence we need
Integration & pre-commissioning:
■ Essential core competence of FPSO contractor
■ Right now Singapore shipyards are the best location worldwide for integration:
− 3 substantial competing shipyards with capacity and decades of experience
− Unequalled regional resource, procurement & industrial complex
− Most business friendly possible location
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Requirements in
Procurement and Building
Process
Preferred contract strategy: E+P+C
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■ In addition, BWO’s preference is to have a “Competitive Relationship” with small numbersof competing key sub-contractors and/or vendors.
Requirements to BWO subcontractors
■ Competitive Bid process is BWO standard approach
■ Approved Subcontractor List is maintained taking the input from Operation Fleet
(life-cycle feed back)
■ Clear definition of Scope of Work and applicable specifications when ITT / RFQ
package is developed
■ BWO T&C’s to be applied in comparison to Subcontractor’s T&C’s
■ Proven “Technology” and “Track Record” are the key words for the selection of
suppliers / subcontractors (BWO put innovative approach when designing the
facility, but individual element to be “proven”)
■ Collaborative working approach – Pre-mobilization audit / Kick Off Meeting / Weekly
meeting / Quality Surveillance Program – we will not let Subcontractor failing to
deliver
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Cost breakdown:
■ FPSO project with new purpose built FPSO hull
■ Typical modern FPSO will have more than US$ ½ billion in procurement and sub-contracting
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Cost definition at project start
■ The following illustrates why the FPSO business remains quite risky and requires
substantial competence.
■ Most major cost elements are not firm when a contract is signed with the client.
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Sub-contractors & suppliers
■ This is a time
snapshot of
BWO’s most
recent biggest
suppliers and
sub-contractors
by order of
value.
■ Over the same
timeframe, BWO
had over 320
suppliers or
subcontractors
from which it
procured in
excess of US$1
million.
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FINANCE
Strong and supportive lending banks
■ BW Offshore refinanced it’s main credit facilities in 2010/2011
− USD 2.4 billion 7-year credit facility
− The syndication of the facilities was substantially oversubscribed
■ New credit facility signed in 2013 for BW Joko Tole
− USD 285 million 5-year credit facility
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Lending banks
Financing overview
■ USD 2,400 million credit facility ~ maturity March 2018 (LIBOR +200 bps)− Remaining term loan of USD 1,001 million (initial amount USD 1,700 million)
− Semi-annual payment of USD 111 million
− Drawn USD 310 million on USD 641 million RCF (USD 68 mill LC included in RCF)− Full bullet at maturity
■ Umuroa facility ~ maturity October 2015 (LIBOR +200 bps)− Remaining term loan of USD 63 million (initial amount USD 130 million)
− Quarterly instalments (USD 4 mill) and bullet (USD 30 million)
■ BW Joko Tole facility ~ maturity June 2018 (LIBOR +250 bps)− Remaining term loan of USD 221 million (initial amount USD 250 million & USD 35 mill LC)
− Quarterly instalments (initial USD 15 mill reducing to USD 9 million)
■ BWO01 bond ~ maturity March 2017 (NIBOR +425 bps)− NOK 500 million (approx USD 90 million)
■ BWO02 bond ~ maturity March 2018 (NIBOR +415 bps)− NOK 500 million (approx USD 87 million)
■ BWO03 bond ~ maturity March 2019 (NIBOR + 350 bps)− NOK 750 million (approx USD 125 million)
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CONCLUSIONS
Conclusion
Successful investments in the FPSO space require:
■ The right client
■ The right project
■ A well defined and specified end product
■ Support from the right banks
■ Selection of the right subcontractors
■ Efficient competition
■ Assembly in an efficient hub (Singapore)
Other possibilities:
■ Export financing
■ Equity partners
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Q & A
26March 2014