Marginal field development by adopting FPSO lease contract

FPSO (floating production, storage and offloading system) plays important role for recent marginal offshore oil fields development. There are several reasons why FPSO is widely used for such field development Major technical advantages are adaptability to wide range of water depth and standalone package. Commercial advantages of FPSO are minimum CAPEX and shorter time for facility construction. To enhance the commercial advantages, lease contract of FPSO is widely adopted. Lease contract can minimize operator's CAPEX and is suitable for early production. Lease contract also benefits contractors by depreciating the facility cost for longer life period as to be used for multiple field development. Very recent charter contract of FPSO often includes the operation and maintenance (O&M) of FPSO. In this case, O&M contractor will supply competent operation and maintenance staff with minimum overhead. The competitiveness of O&M contractor will be enhanced by undertaking several field operation. The author's recent experience in FPSO time charter contract is presented as an example.