Along with the Canada submarine program, Hanwha Ocean is keeping close watch on whether it will win an ultra-large offshore oil plant contract for the Venus oil field in Namibia, Africa. Hanwha Ocean is competing with SBM Offshore of the Netherlands over the fabrication of an FPSO (Floating Production Storage and Offloading), a deepwater "floating production, storage and offloading" facility to be deployed at the Venus oil field in the Orange Basin off Namibia.
If Hanwha Ocean wins the Venus FPSO project, observers say it will likely secure additional FPSO orders in oil field development projects expected to follow in Namibian waters.
According to the shipbuilding industry on the 25th, TotalEnergies, the operator of the Venus oil field development, is expected to make a final investment decision (FID) on the Venus development next month. TotalEnergies has reportedly submitted an environmental and social impact assessment and an environmental and social management plan to Namibian authorities, and is undergoing the oil field development plan (FDP) approval and environmental permitting process. With TotalEnergies having shortlisted Hanwha Ocean and SBM Offshore as final candidates, the selection of the FPSO contractor is also expected to follow soon.
The Venus project is a development of the Venus oil field discovered in Block 2913B, a license area in the Orange Basin offshore southern Namibia. The FPSO to be installed there is planned to handle about 150,000 to 200,000 barrels of oil per day produced from subsea production wells. If the project proceeds as TotalEnergies has outlined, oil production is slated to start in 2030.
Overseas energy outlets including Offshore Magazine estimate the total investment required for the initial development phase of the Venus oil field (based on the first production facility) at several billion to $10 billion (about 15 trillion won). The figure includes up to 40 subsea well drillings, subsea production facilities, export facilities, and the FPSO. TotalEnergies earlier indicated the integrated subsea production facilities package contract would be at least $2.5 billion (about 3.85 trillion won). The FPSO hull construction contract is also estimated to reach several trillion won.
A shipbuilding industry official said, "With ultra-large FPSO orders continuing mainly for oil field developments in Brazil and Guyana, shipyard docks have reached saturation," and added, "TotalEnergies is also in a situation where it cannot easily delay placing the Venus FPSO order."
TotalEnergies is said to have sparked a price competition between Hanwha Ocean and SBM Offshore by demanding a production cost of under $20 per barrel. Hanwha Ocean's Energy Plant Division is staking everything on winning the Venus FPSO order. The Energy Plant Division has remained in the red due to permitting delays and a lack of workload on previously awarded projects. If it succeeds in winning the Venus FPSO, it expects to reduce fixed-cost burdens and gain an edge in bidding for large deepwater plant projects likely to follow in Namibian waters, including the Mopane oil field.
SBM Offshore has installed and operated more than 40 FPSOs worldwide, the most in the industry. It is regarded as having capabilities that cover the entire lifecycle of FPSO projects, from design and construction to installation and operation. It is currently operating 15 FPSOs in South America, including Brazil and Guyana. It holds a significant share in the global crude oil supply chain.
To win the Venus FPSO order, SBM Offshore has formed a united front with Chinese shipyards. Its strategy is to split hull construction, topsides fabrication, and final assembly among multiple Chinese shipyards to enhance price competitiveness.
Hanwha Ocean, in contrast to SBM Offshore's partitioning-style outsourcing, is highlighting its strength in building the entire unit in-house at a single yard. When the hull and topsides are made at different locations, minute mismatches can occur during integration, increasing the risk of rework or delivery delays. Hanwha Ocean's competitive edge, it says, is reducing quality error risks and meeting delivery schedules through end-to-end fabrication at one yard.