Africa a Hotspot for Converted Tankers

Old tankers don?t fade away; they just become storage and offloading units in the world?s busiest offshore fields. Most are single-hull tankers that take on another lifecycle as converted floating production, storage, and offloading vessels (FPSO).

Africa is now a hotspot for FPSOs, as 36 are now operating in the offshore coastal waters, and another 25 are being modified or under consideration. FPSOs reduce the costs of building terminals and new ports, and oil companies usually obtain older tankers near the end of their lifecycles for modification into storage. As a matter of fact, one of the largest tankers in the world is currently being used in the Middle East as a storage unit.

Africa?s top oil producer, Nigeria, intends to increase its output by 80 percent to 4.5 million barrels per day by 2010. And, the current African offshore hotspot, Angola, intends to pump up to two million barrels a day by 2007 from its current production of 800,000 barrels per day.

Today, with tanker rates at their highest levels in 35 years, and stricter regulations on single-hull tankers having diminished their availability, cheap FPSOs are a causality of booming markets. Many single-hulls are being converted by owners to meet market demands.