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BP sets ground for Angola subsea race

UK supermajor eyes pre-FEED SURF and SPS contest for deep-water project

BP is set to launch a major, integrated subsea engineering and design contest next month on its PAJ 100 project off Angola where studies are already under way on the deep-water scheme’s 100,000 barrels per day floating production, storage and offloading vessel.

Industry sources said a pre-front-end engineering and design contest for PAJ’s subsea umbilical, riser and flowline system and its 10-well subsea production system will likely run until the end of this year.

After proposals are evaluated, FEED studies will begin and evolve into a turnkey SURF and SPS contract worth between $500 million and $1 billion.

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A final investment decision is expected to be taken on PAJ 100 — which calls for the exploitation of the Palas, Astraea and Juno fields in Block 31 — in the second half of 2020.

First oil is currently targeted to flow in late 2022 or early 2023.

All the major subsea houses are expected to chase this integrated package — McDermott-Baker Hughes (BHGE), Saipem-Aker Solutions, Subsea 7-OneSubsea and TechnipFMC.

BP’s contracting strategy for the FEED stage is currently not known.

Observers said one solution would see the operator pursue the model used on its Greater Tortue-Ahmeyim liquefied natural gas project off Senegal-Mauritania, where BP chose one group to carry out FEED studies, which led to an engineering, procurement, construction and installation order.

Alternatively, two contractor groups could face off in a FEED contest at the end of which one would be selected for the prestigious EPCI package.

Upstream understands that the PAJ project, which lies in 1600 metres of water, calls for two production wells on the Astraea Central discovery, another two on Palas and one producer on Juno.

Between four and five water injection wells are also needed in the three finds.

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Two manifolds are thought to be needed — at Astraea Central and Palas — while each discovery will likely host a water injection termination unit.

About 25 kilometres of production flowlines are required, with one — a 12-kilometre link between Juno and Palas — expected to be heated to address flow assurance issues.

A 10-kilometre line between Astraea Central and Palas will have to cross a submarine trench.

At least 25 kilometres of water injection lines may be needed as could a 10-kilometre service line to Astraea Central.

A further 25 to 30 kilometres of umbilicals also look to be on BP’s radar.

BP’s base-case concept is to deploy rigid flowlines and risers. Subsea bidders will also likely have the option to come up with solutions to develop the Astraea North and Astraea South discoveries.

Oil will be offloaded from the FPSO via tandem-moored shuttle tankers while gas will be piped to BP’s PSVM complex serving the Plutao, Saturno, Venus and Marte fields, also in Block 31, before being sent to the onshore Angola LNG plant.

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BP’s base-case FPSO characteristics include the ability to handle up to 100,000 bpd of oil, 100,000 bpd of produced water, 80 million cubic feet per day of gas and to inject up to 120,000 bpd of seawater, with a storage capacity of at least 700,000 barrels.

Upstream was told that SBM Offshore and Modec are currently carrying out pre-FEED studies on two vessels being considered for redeployment to PAJ.

It is understood that the two players’ studies are focused, respectively, on the OSX-2 and OSX-3 vessels, one of which BP plans to redeploy at PAJ. “They want to use SBM and Modec and they want to use the OSX-2 and OSX-3,” said one project watcher.

SBM delivered the OSX-2 FPSO to the now-defunct Brazilian oil service company OSX in 2013, but it was never used, while Modec delivered OSX-3 to the same operator and also in 2013.

Sources said BP wants to lease an FPSO but questioned how this type of deal could be arranged due to the OSX vessels’ complex ownership structures.

It has been suggested that leasing arrangements could be simplified if SBM — which has its Sonasing joint venture based in Angola — and Modec acquired the two OSX FPSOs, but one informed observer said: “They are not interested.”

Another possibility could be that the two floater players could bid for an operations contract, leaving the vessels’ ownership structures unchanged.

Otherwise, BP could buy its preferred vessel and hand out an operations contract.

"If they buy (OSX-2 or OSX-3) and free-issue it to (SBM or Modec), then they may be interested," said one market watcher.

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OSX-2 has been laid up off Karimun Sembawang Shipyard in Indonesia since delivery, while OSX-3 is producing less than 10,000 bpd at Dommo Energia’s Tuburao-Martelo field off Brazil.

In November last year, Dommo signed a 20-year charter deal with the OSX-3 owners, which is subject to an early termination clause.

If SBM or Modec turn out to be uninterested in PAJ 100, then BP may contact other players such as Bumi Armada, Saipem, Yinson and HBA Offshore to gauge their interest.

This could jeopardise BP's development schedule for PAJ.

PAJ 100 — which one informed source said holds 150 million barrels of recoverable oil — is being developed under a marginal field fiscal regime enacted by Angola’s government.

BP has a 26.67% stake in Block 31 and is partnered by Sonangol P&P on 45%, with SSI — the Sinopec-Sonangol joint venture — on 15% and Equinor on 13.33%.

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