Financial resilience analysis of floating production, storage and offloading plant operated in Norwegian Arctic region: Case study using inter-/transdisciplinary system dynamics modeling and simulation

The financial resilience of a Floating Production, Storage and Offloading (FPSO) plant is investigated through a hybrid modeling approach. With linked sub-models for economics, reliability and process safety, simulation results of the underlying transient nonlinear phenomena are shown, which represent the complex behavior of operation of the FPSO. The economics model is based on the Norwegian tax system with net cash flow as the main quantity. In the reliability model, statistical methods are used to obtain probability density functions for individual topside and subsea components. The safety model is centered around EHS1 time, in which a sufficiently high skill level is aimed to be maintained. Ample emphasis is given to parsimonious modeling, in which various engineering concepts are used in a way which avoids visual pollution.It is concluded that organizations that operate FPSO plants (under Arctic conditions) are not financially resilient per se, other than through a previously accumulated cushion of cash, which can rapidly deplete due to insufficient maintenance and repair of equipment, and even more so in case of major or frequent accidents. A (much) more conservative revenue stream should therefore be assumed as ground truth when considering exploration and exploitation of petroleum reservoirs in sensible (deep sea) ecosystems, as these are characterized by low natural resilience and also low potential for recovery.This work provides a set of analytical tools for technical managers, re-insurers and system engineers from the petroleum industry, which give a quantitative and more holistic perspective on the financial risks involved in such projects. The outlined general methodology, domain-driven design for implementation, and complete model description allow to rebuild applications for other contexts.

Automated summary

This study investigates the financial resilience of an FPSO plant using a hybrid modeling approach. A linked economics model, reliability model, and safety model are used to simulate the complex behavior of the FPSO operation. The results highlight the importance of sufficient maintenance and repair of equipment to prevent rapid depletion of cash reserves and major accidents. Conservative revenue streams should be assumed when considering petroleum exploration in sensitive ecosystems.