BW Offshore CEO: Decreasing oil production will

not affect FPSO sector.

Carl Krogh Arnet, Chief Executive Officer of BW Offshore speaks to Oil & Gas IQ

Editor Bryan Camoens on the impact renewables will

have on FPSOs, financing challenges and Asia’s role in

the FPSO market

Arnet has been employed as the CEO of BW Offshore

since the 1st of September 2008 and has been the

Managing Director of APL since 1996. Prior to joining

APL, Arnet held various positions at Norsk Hydro in the

period from 1981 to 1996, including Offshore Installation

Manager and Vice President.

Oil & Gas IQ:

In what way will the increasing influence in renewable

energy affect the FPSO industry and how will FPSO’s

adapt to the energy shift from fossil fuels to

renewables?

Carl Arnet:

World oil production is naturally declining with 4-6% annually according to analysts.

Considering the importance and portability of liquid hydrocarbons, we don’t see any

change in the prospects for the FPSO industry going forward caused by a shift to

renewable. We expect renewables to substitute other energy sources locally.

Oil & Gas IQ:

What sort of financing challenges are FPSOs facing and how difficult will it be for

the industry to acquire financing in these volatile economic times?

Carl Arnet:

The FPSO industry has delivered sub standard returns due to unprecedented cost inflation

over the last few years. This was caused by several sectors peaking in the same time

interval competing for the same resources; shipping, yards, equipment manufacturing and

engineering. We are seeing a positive development for the financing of new projects, but

we expect that the financiers will be much more selective on the FPSO contractor, the

field owners and the contractual terms and conditions.

Oil & Gas IQ:

Where do you see the future of FPSO and FDPSO in 10 years time and how will the

current economic climate affect the evolution of the industry?

Carl Arnet:

The FPSO industry will see good and steady growth with an average of 15 units per year

in the coming 10 years. Larger players will become much larger and the medium players

will be under pressure.

Oil & Gas IQ:

What sort of an impact will Asia have on the global FPSO sector?

Carl Arnet:

We expect about 25% of the future market to be Asia, but Asia will be smaller value per

unit and count for less than 25% of the total market in value terms.

Oil & Gas IQ:

With 159 projects in the works, does the industry as a whole have enough skilled

talent to man and manage the upcoming FPSOs or will vessels be left out to dock

while staff receive the required training?

Carl Arnet:

We will constantly need to focus on developing talent. The biggest problem the industry

is facing is the age composition of the work force. There are few young people in the

business and we should start to focus on attracting young people.

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Carl Krogh Arnet will spoke on the ‘Innovations in FPSO Technology’ and discussed

‘the position of FPSOs in today’s field development strategy’ at the 11th

annual FPSO

congress 2010. For more information on the event please contact the Rani Kuppusamy at

enquiry@iqpc.com.sg or visit www.fpsoasia.com .