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SBM inks floater pact with ExxonMobil

Pair that are working together on Stabroek block off Guyana sign agreement over potential new orders

SBM Offshore has deepened its already lucrative relationship with US supermajor ExxonMobil after the pair signed a long-term agreement covering future potential floating production, storage and offloading orders.

The non-exclusive agreement “establishes the general legal framework and specific terms in relation to the engineering, procurement, construction and installation work regarding potential future contracts”, SBM said on Friday.

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It relates to leased floaters, which includes build-operate-transfer projects that cover short-term leases.

The two companies work closely in Guyana in particular, where SBM is supplying the FPSOs for the first and second stages of development of the giant Liza oilfield on the prolific Stabroek block, while it is also likely to supply the third FPSO on the block.

SBM chief executive Bruno Chabas said: “This agreement is a continuation of our long history of successful teamwork between our companies, further strengthening our long-term co-operation.”

Severine Baudic, SBM’s managing director floating production solutions, added: “This agreement aims at extending our constructive business relationship with ExxonMobil that has been created through delivering a series of major offshore projects together.”

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The Dutch contractor has identified more than 25 potential FPSO awards industry-wide in the next two-and-a-half years out of some 35 prospects, but only around nine projects are in its target market of large floaters — typically units above 100,000 barrels per day capacity.

Of the prospective FPSO awards for the remainder of this year until the end of 2021, SBM sees the Brazilian market yielding 12, with three in Guyana, four in Asia-Pacific, three off West Africa, two in the North Sea and one in each of eastern Canada, the Gulf of Mexico and Argentina.

“In terms of total FPSO market awards, our expectation is that, over the coming three years, we are going to see 10 FPSOs on average going to be awarded per year,” Chabas said on an analyst call following the company’s first-half results in mid-August.

Seven FPSO awards were made in the first half, with SBM grabbing two — Mero-2 from Petrobras in Brazil and Liza Unity from ExxonMobil off Guyana.

Chabas said he expects the global total for this year to be between 10 and 12, “and we are seeing the same trends for the coming two, three years”.

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The company’s own capacity has been kept at two-plus per year.

Chabas is also still hopeful that Mexico can develop into a sizeable market for FPSOs.

“I think there is still an opportunity. When you see some of the blocks that have been bought by some operators... the potential of development in Mexico is quite significant,” he said last month.

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