Member Article

It was not until the late 1970s that deep-water offshore oil and gas exploration became significantly viable. The driver was the ever increasing demand for oil and gas products that provided the opportunity to raise the capital necessary to design and then build the incredibly complex floating assets needed to explore for and then to produce oil and gas in such hostile environments. Today, it is not unusual for oil and gas drilling and production to be undertaken in depths in excess of 10,000 feet of water. The units that undertake such work are incredibly complex feats of engineering and may take up to three years to construct.

Certainly at the peak of the market, the most complex and technologically advanced units cost in excess of US$1 billion to construct. The offshore oil and gas industry today, however, requires more than merely the deployment of drilling units for its operation. The industry now requires a full range of vessels to support it including FPSOs (floating production storage offloading), FSUs (floating storage units), accommodation vessels (floatels), heavy-lift vessels, pipe-laying vessels, and myriad support vessels. Perhaps unsurprisingly it is the largest and most sophisticated commercial shipbuilding yards that have moved into the construction of offshore oil and gas floating units. Incentivised by the potentially lucrative nature of building such assets, in recent years it has tended to be the shipyards of South Korea, China and Singapore that have been the pre-eminent builders.