SBM executive sees strong FPSO market on back of deepwater trend

Pierre Morin, SBM Offshore Group Business Development Director

Interview with PIERRE MORIN, Group Business Development Director, SBM Offshore 

As a market leader with over 60 years’ deepwater marine expertise, SBM Offshore’s core business has been designing, building, and operating innovative ocean infrastructure that has enabled cleaner, more efficient energy production. As such, the company has been a leader in FPSO construction and operation, a role that has increased in importance, as the deepwater oil and gas sector has expanded in recent years. 

Accordingly, SBM Offshore was a key participant in World Oil’s recent Deepwater Development Conference in Lisbon, Portugal. During that event, SBM’s Group Business Development Director, Pierre Morin, visited with World Oil Editor-in-Chief Kurt Abraham to discuss the market forces at work in deepwater locales, how his company is addressing them, and his view of what to expect in future years.  

World Oil (WO): So, Pierre, how would you characterize the current momentum of the deepwater market, given the sustained investment from major operators and the growing focus on ultra- deepwater exploration? 

Pierre Marin (PM): We see it as very strong. That actually translates into our current workload. We have a lot ongoing work, a lot of projects and execution. So that's for now, but then for the future, we also see a very promising future, with the majors spending a lot of money in exploration, in our favorite playground. That would be in the basins on either side of the Atlantic—South America to start with, but also on the other side, off of West Africa. 

A lot of investment is being made, suggesting that a lot of projects are coming up in the next five to 10 years and in the deep water. Why we believe strongly in deep water is that past projects have proven the economics. We know the breakeven price is quite competitive. We know that the CO₂ emissions are quite competitive, as well. 

Fig. 1. SBM Offshore has already deployed four FPSOs offshore Guyana for ExxonMobil. Image: SBM Offshore.

That's unlocking a lot of potential in existing countries, where there's already a lot of history in oil and gas, and also opening up new countries.  

WO: We all know deepwater activity is growing in several regions. Which areas or countries do you see driving the next cycle of project awards, and what are the market fundamentals supporting this shift? 

PM: South America leads the way, starting with Brazil. We've been working in Brazil for more than two decades. Petrobras has been awarding projects on a very regular basis, and they will continue to do so for the next many years. Brazil still comes first in South America, followed by Guyana for the past 10 years or so. We've been very successful there with ExxonMobil. 

And we know it will continue. There are very prolific fields [off Guyana], and we've already deployed four FPSOs there, Fig. 1. There's another one in construction, and a few more are under discussion. So again, for deep water and for SBM, the future is very bright. Those are the main two countries, I would say, Brazil and Guyana, and now coming shortly, Suriname in South America. 

That's another kind of new country (Suriname) as far as oil and gas is concerned, and for SBM. But yes, we’ve got a project with TotalEnergies now, and there's a lot of exploration ongoing. That may mean more projects coming up for that side of the Atlantic. Then, moving on to the other side of the Atlantic in West Africa, Namibia is getting very reactive and exciting. 

It’s the same as Guyana a few years ago, or Suriname a couple of years ago. There's no real oil and gas industry there, but a lot of promising exploration and active tenders. We are looking at that very actively.

We see that in countries where we did business in the past and are still operating, but where we didn't have new projects for quite some time. Things are again getting more dynamic. We see it in Angola; we see it in Nigeria. Some recent discoveries along the Ivory Coast, as well for a few operators. So, that's bringing some optimism onto our side in developments. As we've seen here, at the Deepwater Development Conference in Lisbon, we've certainly noticed the fact that deepwater activity is on a bit of momentum right now. 

Fig. 2. New FPSOs are more and more complex, as engineers try to account for more gas to go with the oil in their designs. Image: SBM Offshore.

WO: It's certainly moving faster than the offshore activity in general. And speaking of FPSOs, what major trends are shaping the next-generation concepts, as the industry prepares for more complex deepwater reservoirs and higher capacities?  

PM: Yeah, definitely. We see the latest projects that have been awarded to us as increasingly “deep,” in terms of mean water depths, production, throughput, etc. 

We see more and more gas in what we produce on the FPSOs. It keeps increasing, making the FPSOs more and more complex, because bundling so much gas and so much oil makes it a bit complex for the engineers to design, Fig. 2.

But as we've heard over the last couple of days, there are limits to that, too. Then, of course, we have the ESG factor. ESG expectations are increasingly influencing early-stage project discussions. As the offshore production increases, decarbonization becomes more critical, and carbon solutions are proving most effective for the FPSOs. 

And how is SBM offshore integrating these ESG priorities into its business development conversations? You touched base on standardization, so that's a good point to keep our engineers away from reinventing the wheel and redesigning from scratch all the time. There are things that you don't need to reinvent at each project. 

They can be standardized, and then you free up some time for your engineers to work on the other topics that really matter. ESG considerations are obviously very important for us, and very important for our clients and everybody in the industry. There are a couple of initiatives that we can propose to clients. 

Some are already implemented on existing units. Some are ready to be deployed here. We're a bit dependent on our clients. I can name a few. On recent FPSOs, we deployed all-electric equipment, rather than the gas-driven versions for the compressors. There's the closed flare system that allows you to reduce the flaring to the bare minimum, where we don't do routine flaring anymore, because that's a big source of CO2 emissions. There's the deepwater suction risers, so that for cooling of all your machinery, by sucking the water deeper below the surface, you get access to colder water and then you are more efficient.  

So, these are things that we have deployed already on some units. Then there are some further initiatives that are ready and can be deployed upon client request. We have a modular carbon capture solution that can be deployed on FPSOs. So today, it's more at the stage of studies with key clients, but it has not been deployed on our units yet. 

WO: Another thing we've been hearing about during this conference is that digitalization and energy transition accelerate how innovation and digital performance optimization are transforming the way that SBM Offshore manages and develops all its deepwater FPSO assets. 

PM: On digital, I'll focus on the operations. Ultimately, what you want to do is pair is safety with the maximum uptime possible. We've been collecting, for years, a lot of data from all the various equipment installed, the hundreds or thousands of equipment pieces we have onboard. But these data were not used to their best, to help us do that better. 

Fig. 3. Digital transformation is allowing more inspections to be done remotely, cutting down on the need for human intervention and direct examinations. Image: SBM Offshore.

We teamed up with Cognite to help us collect these data and then use them in an intelligent manner to accelerate the predictive maintenance, as opposed to reactive maintenance. We teamed up with SLB to have a full understanding from the well, all the way to topside and help us manage the way we operate the units to gain on up-time, on safety and on efficiency. 

And by efficiency, I mean up-time, but I also mean CO₂ emissions. So, that's using data. Technology also supports us in some other aspects. There are some areas on the FPSO where you had to send people to inspect, Fig. 3. Tank inspection, for example, or underwater operations—we still had to send people. There are divers over the side to check the stuff. Now, we are getting away from this and sending robots or drones, and remotely operated vehicles to do this task. And again, removing human intervention then makes it much safer at the end of the day. 

WO: Changing the angle just a bit, local content is a feature in many countries that has become a defining factor in some of these new deepwater markets. So how is SBM offshore evolving its approach to that?  

PM: We capitalized on the experience we accumulated. We started with some expats on the key positions but gradually transferred to local resources, Fig. 4. 

Fig. 4. SBM Offshore has pursued a policy of turning over as many jobs as possible to local talent in the countries in which it operates. Image: SBM Offshore.

Same for the supply chain, getting the maximum from inside the country rather than importing people or equipment. That helped us big time when SBM entered new countries. Recently, I can mention Mexico, Suriname and Namibia. And some of these countries are historic in oil and gas, and some aren't. But this experience helped us develop the way that we would approach local talent and train them to become the future operators of our units. 

That starts very early in the process. You don't start this process when the FPSO arrives in country. We don't do that, only because it looks good or because clients are asking us to meet targets that are required. Our experience goes back decades ago, when we started operating in Brazil, and today, we are proud to say the biggest contingent of employees in SBM is based in Brazil, onshore and offshore. 

More than 90% of the employees working in Brazil are Brazilian nationals. This experience that we accumulated in various countries—Brazil, Angola—helped us big time setting up the operations in Guyana. Today, Guyana is really a success story in that respect. The way we, together with ExxonMobil, implemented the shore base and the training center, and the relationship we have with the local supply chain and all these initiatives we are doing in-country. 

This helped us when we opened up offices and business in Suriname and now in Namibia. We are learning from this experience. We are bringing our clients and the authorities from these new countries. We show them what we managed to implement in Brazil. In Guyana, the proof is in the pudding. 

You can show a nice brochure and PowerPoints, but ultimately, visiting a training center in Guyana speaks for itself. It’s really important. And we said early engagement with clients many times during this conference. That also goes to local content.  

WO: What are SBM's strategic priorities in the long term? 

I see two pillars. That's the strategy of the company. We focus on the core business. That's what we call strengthening or advancing the core. We have been very successful on FPSOs. We want to be successful again for many years on FPSOs. So, we keep progressing, we keep embarking on lessons, and we improve. 

So that's advancing the core, making our deliveries even better. That's through standardization, where we bring to the client’s schedule certainty, and cost certainty. So that's very important. So that's for the FPSO side. And then there's the other aspect that we call pioneering more. And this is more looking further ahead. 

What do we do, or what will we do, after the FPSOs? So, here we’ve actually got people within SBM working on that, looking at the energy of the future. And again, we’re being selective because for today, nobody has found the perfect solution. Right? We need to look at everything, not fall in love with our ideas, look at what the industry is doing, what our clients are doing. 

Looking at all the topics like nuclear power barges or blue ammonia. And we're doing this through collaboration. That's something that we probably change a bit in SBM. Not having the ambition to do everything on our own, but rather collaborating with partners who have prior experience and where we can add value in the collaboration. 

PIERRE MORIN is a 25-year veteran of SBM Offshore and is the company’s Group Business Development Director in Monaco, a position he has held since September 2024. Previously, he was Project Director in SBM’s Kuala Lumpur office from July 2019 to September 2024, as well as Project Office Director in that same office from April 2019 to July 2019. In the previous 18 years, beginning in 2001, Mr. Morin served as both an engineer and manager in a variety of positions of increasing responsibility. He holds a Masters degree in Marine & Offshore Technology from French public engineering school SeaTech, which he received in 2001.