Research on Innovation of Floating Production Storage and Offloading Unit’s Rent Mode under Low Oil Price

Xue Jinyan(CNOOC Energy Technology & Service Oil Production Service Co.)
Li Wenwen(CNOOC Energy Technology & Services Limited.)
Tang Mingjun(CNOOC Energy Technology & Services Limited.)
Wu Hongjuan(CNOOC Energy Technology & Service Oil Production Service Co.)
Zhou Bin(CNOOC Energy Technology & Service Oil Production Service Co.)

Abstract

After many years of exploitation, onshore oil and gas resources are about to enter a recession period. Oil and gas will mainly come from oceans in the future. Generally speaking, the exploration and production (E&P) cost of oil from offshore is much higher than that of oil from onshore, so it is more sensitive to oil price. However, in recent years, oil price has been hovering at a low level for a long time, almost close to or even lower than the E&P cost of oil, which directly affects the development of oilfields. Besides the influence of oil price, some oilfields present the characteristics of marginal reserve scale, short peak production period and output rapidly declining. There leads to short economic life period and makes the economic benefit close to or lower than oilfield’s hurdle rate, which increases the difficulty of offshore oilfield development. As an important part of oilfield development, Floating Production Storage and Offloading unit, its investment mode and rent mode directly affect overall oilfield’s rate of return and the economic life. This paper chooses lease mode as the research object based on the analysis of investment mode, and further puts forward rent mode related with oil price through the analysis of traditional rent mode, and illustrates the advantages and disadvantages of various rent modes and their applicability so that the lessor chooses the right mode to achieve Win-Win with Oil Company and promotes the development of oilfields under low oil price.

Keywords

Low oil price; Floating production storage and offloading unit; Rent mode; Oilfield economic life

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DOI: http://dx.doi.org/10.26549/jfr.v4i2.4032