Ithaca Energy is advancing the development of the Cambo oil project in the UK North Sea by tendering for a newbuild floating production, storage and offloading (FPSO) vessel, with a focus on a conventional ship-shaped design rather than a previously considered cylindrical one.

Project Status and Tender Process

The company is currently pitching a major engineering and construction contract to Asian offshore yards, specifically in China, for the FPSO and associated subsea equipment. The tender process is expected to be completed by mid-2026, which will provide a consolidated project cost and schedule to support a de-risked final investment decision. However, the UK government's Energy Profits Levy (windfall tax) could potentially impact the development plans.

FPSO Design Change

Ithaca had initially matured a development concept based on a purpose-built cylindrical FPSO designed by Sevan Deepwater Technology. Following a recent technical and economic refresh, the company has confirmed a shift to a traditional, ship-shaped FPSO design as the base case solution, opting for a newbuild vessel. The reasons for this change are not explicitly clear, but market sources note potential disadvantages of the cylindrical design, such as limited storage capacity for stabilised oil and produced water, and restricted deck space, compared to conventional FPSOs.

Context of Cylindrical FPSOs

Cylindrical FPSOs are proven to perform well in harsh weather and marine environments, with examples like the Penguins in the UK North Sea, Goliat in the Norwegian Barents Sea, and the previously operational Western Isles in the Shetlands area. While the design has demonstrated validity, some past projects faced construction challenges during execution, though these were not fundamental to the design's effectiveness.

Additional Project Components and Partnerships

In addition to the FPSO and subsea scopes, Ithaca is tendering for development drilling, requiring a harsh-environment deepwater rig for 900 days starting in 2027. The company owns 100% of the Cambo project but is actively seeking farm-in partners. Regulatory progress is advancing, with an updated Field Development Plan and Environmental Statement targeted for submission before the end of 2025, reflecting optimisations made over the past year and leveraging experience from the Rosebank project.

Field Significance

The Cambo discovery is one of the largest undeveloped oilfields in the UK, located in the West of Shetland area, with gross best estimate resources of 146 million barrels of oil equivalent.