Chevron to launch fresh Rosebank FPSO tender

US giant in new attempt to develop problematic asset off UK with bid process to be opened up to South Korean trio Daewoo, Samsung and Hyundai

US supermajor Chevron is set to launch a fresh bid process this year for a floating production, storage and offloading vessel destined for its challenging Rosebank project on the UK Atlantic Margin.

Last month, the California-based player unexpectedly cancelled a $2 billion contract it had awarded to Hyundai Heavy Industries in April 2013 — without a competitive bid process — to provide a newbuild FPSO.

This surprise move led to suggestions in the market that Chevron would exit Rosebank — subsequently refuted by a spokesman — because it had not been able to come up with a viable development solution despite 12 years of tinkering.

Upstream understands the operator is committed to developing the asset and plans to hit the market with fresh invitations to tender this year for a newbuild FPSO.

However, a source said that this time the bid process will be opened up to Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries as well as Hyundai.

“It’s still going to be a newbuild FPSO and it will be a South Korean yard supplying it,” said one source.

A tentative schedule would see a contract awarded in 2018.

“They will come out with a new ITT for the FPSO sometime this year and then they want to place the contract in early 2018,” said the project watcher.

A final investment decision was expected by the end of this year but there are now suggestions Chevron may put it off right up until its exploration licence for Rosebank expires in mid-2019. Rosebank is located in licence 1026 — which covers blocks 213/26b and 213/27a — and its second exploration period is due to expire on 31 May 2019.

“Chevron wants to take a a final investment decision as late as possible before the expiry (of the exploration licence) because they think they can get a better price for the FPSO,” said a source.

One project watcher said the supermajor wants to reduce the FPSO price tag by $100 million to $150 million.

A Chevron spokesman declined to comment on the project status and schedule.

As yet, it is unclear if the specifications of the floater would change in this new iteration of the bid process.

Under the contract awarded to Hyundai in April 2013, the FPSO was designed to handle 100,000 barrels per day of oil, 190 million cubic feet per day of gas and store 1.05 million barrels of crude.

Since that time, the vessel’s gas processing capacity has fallen to about 80 MMcfd.

Hyundai’s contract called for the FPSO to be installed in 1100 metres of water, exploiting about 240 million barrels of oil and gas equivalent.

Chevron has a 40% stake in Rosebank and is currently partnered by Austria’s OMV and Dong Energy. However, OMV signed deals to sell a 30% stake to Suncor Energy and offload its remaining 20% interest to private equity backed Siccar Point Energy.

Copenhagen-based Dong has also decided to exit Rosebank as part of its departure from the oil business.