Seaview Field: SWLOT Analysis - Case Study Example

Seaview Field will be able to convince the stakeholders on the viability of the project if they see returns from using a rented FPSO before increasing their asset base by building a pipeline. This will easily convince them to put in their money after the first financial quarter (August –November 2015) when Seaview Field will be working with a rented FPSO. This will give them data that can be used in calculating the ROI; hence, attract more fiscal input from the stakeholders. Below is a SWOT analysis of the venture.

Strength 1) The company has received a report demonstrating that the project has high feasibility; hence, it is viable. 2) There is a certainty of an increase in BOPD from 18000 to 20000 guaranteeing more returns in the future 3) It is more economical to rent an FPSO since it can be relocated once the oil reserve is depleted after fifteen years 4) With the FPSO, both the storage and processing and storage will be done offshore; hence, it is a cost-effective method Weakness 1) Lack of its own equipment especially the FPSO 2) Lack of infrastructure (oil pipeline) 3) Insufficient funds to finance the entire project Opportunity  1) The recent good performance in the stock market based on the return on investments has boosted the shareholders’ confidence in the stock market 2) The ability to raise capital in a timeline of seven to nine years by selling their recent acquisitions that are unnecessary to third parties 3) Purchase of a floating liquefied natural gas (FLNG) to cut down on operational costs 4) Purchase of an LPG FPSO to cut down on operational costs 5) Construction of a 4km pipeline from sea to Don Facilities to reduce costs to a bare minimum (Helix Energy Solutions Group, 2013, p.5).  Threat 1) A limited life span of 15 years before the oil reservoir dries out 2) Intense competition from other oil producers 3) The possibility of leakages of the proposed 4km underwater pipeline 4) Stringent rule pertaining to deepwater oil exploitation in case of offshore ventures (Helix Energy Solutions Group, 2013, p6).

Given the above SWOT analysis, the project is viable and the ROI is definitely going to fall within a profitable timeframe. Starting by renting equipment (the FPSO) then building their own infrastructure (4km pipeline) is the most cost-effective approach in this situation.