How investing in the construction and operation of connected FPSO-type vessels can reduce risks and increase effectiveness in the offshore oil energy sector

Paulo Nogueira
05-05-2022 11:13:33
in Oil, Oil and Gas
FPSO Shell Prelude - Source - Offshore Energy Today FPSO Shell Prelude – Source – Offshore Energy Today

The idea is to use digital transformation to mitigate risks and improve the performance of offshore platforms

At Floating production, storage and transfer unit (FPSO) are among the biggest investments that oil and gas producers have to make.

On the one hand, these immense vessels offer the promise of exponentially increasing productivity and flexibilization of storage over their onshore counterparts. On the other hand, they bring a colossal increase in the price of equipment, operation and maintenance.

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According to a survey by McKinsey, the heavy industry project sector exceeded its budget and planning by 30% and 45% on average. The percentages for engineering design, procurement and production (EPCs), on average, are even worse across the industry.

Production is yet another challenge. Due to suboptimal operations, unscheduled downtime and operational incidents, according to Rystad Energy, a growing part of the industry experiences approximately $500 billion a year in deferred revenue globally.

In any case, despite these industry statistics, the most successful FPSO operators are achieving more than 99% in uptime and, in some cases, close to 100%.

But how can companies with a high level of productivity use digital technologies to maintain and or even optimize their existing operations?

For those who are embracing the advantages of the new Floating Production Units (Floating FORproduction storage – FPSO) or looking for an increase in the existing ones, it's time to turn the gear and redirect the trajectory.

A Floating Unit ship could be physically disconnected from the land, but it must still be able to take full advantage of the latest digital technologies developed and the work process.

In this article, we will provide some ideas for the new end-to-end connection strategy to enable producers to proactively mitigate risk and extract greater value from each stage of the lifecycle of their vessel fleet.


Before getting into the issue of digitalization, let's take a closer look at the challenges considering the operational effectiveness of the FPSO.

Reliability and management of key production assets remains critical – unplanned maintenance of a floating production unit costs around 100 times more than the equivalent on land.

Maintenance equipment and skilled labor are always a shortage on board, the need for which represents the high cost and inconvenience with respect to transport equipment and personnel for remote locations.

In addition, the operations personnel turnover rate is higher than average.

New teams must be trained by experts with certified experience to be efficient and adhere to crucial security measures.

All these issues negatively impact the life of equipment and increase the cost of operations and maintenance.

At the same time, health, safety, security and environment (HSSE) is another big challenge. One of the main objectives of the industry is to reduce and eliminate incidents, especially those related to security, leakage (of hydrocarbons) and cybersecurity.

For example, the number of ransomware incidents involving the manufacturing sector increased by 156% between Q1 2019 and 2020. In addition, a number of factories have recently been targeted by cyberattack threats, including one of the largest oil pipelines in the United States, the Colonial Pipeline. In May 2021, the operator shut down more than 8,000 kilometers of the pipeline, which carries 45% from the East Coast's fuel supply, to contain a ransomware breach.


To solve these challenges, the Rockwell Automation recommends that oil and gas companies seek industrial suppliers that use NIST and ISO/IEC 27032 standards throughout their enterprise for ongoing monitoring and management throughout the lifecycle.

In addition, oil and gas producers also need to consider reducing their staff of workers in the production environment and improving their safety conditions. Finally, companies must commit to implementing full regulation regarding environmental care as part of the social responsibilities to be fulfilled, including the drastic reduction of carbon emissions.


The challenge posed by implementing these changes has dramatically affected the effectiveness of large offshore projects. In any case, the creation of a “connected ship”, could help to develop and apply the whole strategy, producers could mitigate these and other risks and put in motion a reduction of the total cost of ownership through the effective initial execution of the project of First Oil Date and achieve long-term operational efficiency.

Based on a fully digitized approach such as those developed by Rockwell Automation, the connected ship benefits every stage of design and operation. Unifying digital strategies and promoting content leverage across the organization is key.

This “digital thread” starts at the design stage and continues through the installation's entire production lifecycle.

Through digital transformation, producers can save on total cost of ownership through effective execution from the start of the project as well as long-term operation. This because:

  • A simplified scope reduces capital costs.
  • Improvements in the project application calendar reduce costs.
  • Improved operations via availability, reliability and maintenance increase production and overall equipment effectiveness.

The result? Through the use of the methodology and technology of connected ships, it is possible to achieve potential savings of up to 150 million dollars per floating production project. Not to mention the long-term benefits.

So why not take steps to control what is possible?

By investing in the construction and operation of a connected vessel, you can effectively reduce risk, boost efficiency, optimize performance and realize the true potential of your assets.

By Greg Trostel and Roger Burnison

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Paulo Nogueira
With technical training, I worked in the offshore oil and gas market for a few years. Today, my team and I are dedicated to bringing information from the Brazilian energy sector and the world, always with credible and up-to-date sources.