OTC 2015: SBM Talks to CNOOC about Lingshui Gas Production Facility

OTC 2015: SBM Talks to CNOOC about Lingshui Gas Production Facility
SBM Offshore holdings talks with CNOOC to supply a semisubmersible production for the Lingshui 17-2 gas field development in South China Sea.

SBM Offshore is holding preliminary discussions with China National Offshore Oil Corp. (CNOOC) to supply a semisubmersible production facility for the Lingshui 17-2 gas field development in South China Sea, a senior company official said Wednesday on the sidelines of the 2015 Offshore Technology Conference in Houston.

"We are indeed talking to them about Lingshui. Right now they are considering a semisubmersible, highly unlikely to be a spar. I am in regular contact with CNOOC and regularly go to China so there is not a specific deadline (on the proposal) right now," Bernard Van Leggelo, group executive managing director revealed.

CNOOC made the mid-sized gas discovery when drilling the deepwater exploration well, which is located at an average water depth of around 4,757 feet and encountered a gas reservoir with a total thickness of about 180 feet, in the Qiongdongnan Basin in South China Sea in March 2014.

Speaking at an OTC industry session on China, the executive shared SBM's experience in executing floating production, storage and conversions (FPSO) conversion projects in China.

He noted that China got a tremendous amount of capacity to offer, with a lot of yard capacity and which are fairly modern and the firm achieved an estimated cost savings of around 25 percent on projects.

"(But) people rushed into China between five and 10 years ago and say China can do everything and let’s do everything. I think a lot of projects suffered a lot ... You have to really understand the capacities, the capabilities and select what you can do and what they can do best and then progressively ramp up."

Still, Van Leggelo said it is a challenge for China FPSO conversion projects to gain full acceptance by its clients as people still remembered the bad stories. It may take two to three years for such projects to be accepted by the industry, he said in response to a question from Rigzone.


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