It was a revolutionary new idea. Historically, single hulled VLCCs which had reached the end of their useful life had been, and still are, converted into FPSOs, destined to sit anchored on top of an offshore oil field for 20 or 30 years or more. Besides having the hull structure already created, these ship-shaped FPSOs are expensive to convert, and they have limitations. They weren’t originally designed to fulfill the role of an FPSO, so they aren’t as efficient as they could be, and as the following video clearly shows, they aren’t the best solution in a harsh environment.
For the past 10 years, Sevan’s cylindrical design concept has proven extremely capable. Not only are they better from a ship-motions standpoint, but they are also lacking a very particular, and complicated structure that is required on board a ship-shaped FPSO… a turret.
Without a turret, these vessels are able to be powered via shore which is a far more efficient power source than onboard systems and their design also allows for a virtually unlimited number of risers.
In 2011, Teekay (NYSE:TK) invested $800 million in three Sevan FPSOs while at the same time taking a significant equity position in the company. From a business perspective, it was a natural fit for both the design/engineering focused Sevan, and the financial and operationally capable Teekay.
At the time of the deal, Teekay CEO, Peter Evensen commented:
“Although the negotiation process has been complex, with many moving parts and counterparties, this is an important transaction for the FPSO industry and represents a rare opportunity to combine the bench strength of two leading specialty FPSO solution providers. The proprietary Sevan cylindrical hull is widely regarded as a safe, highly versatile, and flexible design that can be readily deployed in harsh or benign waters at water depths of up to 3,000 meters. Coupled with Teekay’soperational capabilities and balance sheet strength, Sevan’s engineering and offshore design capabilities and intellectual property represent a powerful FPSO project development combination.”