Repsol Begins Negotiations to Lease FPSO

Repsol has begun negotiations with contractors to lease a Floating Production, Storage and Offloading vessel (FPSO) as part of its plans to expand its offshore development efforts in the Gulf of Mexico. 

The Spanish operator is keen to make further progress in Block 29 where the noteworthy Polok discovery and smaller Chinwol prospect are located. Market sources cited by Upstream report that Repsol is specifically looking to lease a front-end engineering and design contract for a medium-size FPSO, large enough to permit either suezmax or aframax tanker dimensions, with oil production capacity for about 60,000b/d as well as associated gas production. The FPSO will be anchored in depths between 460 and 600m to serve both Block 29 and an adjacent area referred to as Block X.

The discoveries of Polok-1 and Chinwol-1 were announced by Repsol and its block 29 joint venture partners in May 2020, with net oil pay of 200m and 150m, respectively. Repsol secured a 30 percent stake in the project located 88km off the coast of Tabasco in Bidding Round 2.4 in 2017 together with Petronas subsidiary PC Carigali, who hold 28.33 percent, Germany’s Wintershall DEA with 25 percent and Thai IOC PTTEP with 16.67 percent. In drilling the Polok-2DEL appraisal well, which was completed in September 2021 Repsol became the first international company to carry out a test of such characteristics in the Mexican deepwater environment. Its positive evaluation gave the green light for the project to move forward with the development phase. At the time, Wintershall Dea commented that the positive evaluation of Polok-2DEL had provided evidence of the geological potential in Mexico’s deepwater, opening up the prospect of a new play within Mexico’s Salina basin.

Upstream reported that FPSO contractors Bumi Armada, BW Offshore, MISC and Yinson Holdings are eyeing the opportunity, while the same source also suggested that Repsol’s project may be overlooked by two of the biggest floater suppliers: the Japanese Modec International and the Dutch SBM Offshore. However, the pair is expected to focus instead on competing for more lucrative contracts for bigger units in Brazilian and Guyanese deepwater projects. The Spanish IOC is believed to be open to either a conversion model or the redeployment of an existing vessel that features an external turret mooring system. Repsol and its partners have targeted2026 for Block 29 to start producing, while first oil from Block X is not expected until 2027 or 2028. Although Repsol has not yet specified how long the lease-and-operate contract could last, an initial 15-year fixed-term deal, with the option to extend for an additional period subsequently, has been mentioned as a possibility by Upstream.

The Miamte FPSO, leased by Modec, became the first vessel of its type deployed by a private operator in Mexican waters when it was chartered by Eni to serve its Area 1 Amoca-Miztón-Teocalli fields (AMT) at the start of 2022. Miamite boasts a processing capacity of 90Mb/d for oil and 75MMcf/d for natural gas, with storage room for 700Mb/d of crude and a “zero-flaring philosophy.” The immediate production boost provided by the FPSO testifies to the transformative effect such vessels can have on offshore production. Across the three producing Area 1 fields, production totaled 18,881b/d in March, doubling the output of 9,336b/d just one month previous.