In late 2022, sustained high oil prices saw previously marginal offshore energy projects get a new lease of life, as management teams looked to green-light projects that had previously been considered uneconomic.
Why Installation Risk Is the Real Cost Driver in Marginal Field Developments
ICON Engineering Managing Director David Field said at the time: “We’ve been seeing a noticeable uplift in feasibility studies and conceptual plans being revisited in light of sustained higher energy prices. Our Field Development team has been working with both supermajors and smaller independent operators to refresh design concepts and refine capex budgets. While higher energy prices deliver better project revenues, there have also been large changes in the costs of vessels, equipment, and materials used in field developments β in some cases, the new market realities change the form of the development.
“For small offshore marginal fields, offshore installation costs are commonly a major cost component, and where the risks are greatest. ICON’s point of difference to our competitors is our ability to design low-risk installation methods to mitigate transportation and installation risks early in project planning. We do find some facilities designs appear simple, but can expose clients to significant offshore installation risks not properly considered during concept select phases.”
Why Operators Are Turning to Jack-Up Rigs Over Crane Barges
“We are finding many operators wanting to eliminate costly floating crane barge spreads from their platform installation projects by using jack-up rigs for construction,” Mr Field continued. “The operator’s drilling department’s leased jack-up is used for well construction, and is also used for structure installation just prior to drilling. This methodology can significantly reduce project budgets, and eliminate schedule risk caused by delays or unavailability of crane barges and adverse weather.”
This kind of installation-method risk reduction sits at the intersection of ICON’s Rig Installed Platforms and Installation & Execution capabilities. For more on how ICON approaches early-stage concept work, see Studies & Concept Engineering.
