In recent years, offshore industry contractors have incurred heavy losses on large engineering, procurement, installation, and commissioning (EPIC) contracts, also referred to as lumpsum turnkey (LSTK) contracts. Many of the losses are due to schedule delays, and the contract results often do not meet the operators' and owners' criteria for a successful project. These losses have led to an industrywide debate of whether EPIC or reimbursable contracts should be pursued and what model (or solution) could be mutually beneficial for both contractors and operators.The commercial arrangements are further complicated by: • Technology Issues: Most operators increasingly rely on contractors to provide new technology, especially in deepwater and ultra-deepwater developments. Therefore, the contractors must invest in technology development and propose acceptable commercial models for new technology so that win-win situations are provided for both contractors and operators.• International Arena: Many National Oil Companies (NOCs), which operate in countries "open" to the offshore industry's international markets, have stringent commercial terms and expect local content. The distribution of appropriate risks among operator and contractor commensurate with their original roles and eventual rewards would solve this debate.

Analysis of the rapidly growing mobile offshore production system (MOPS) market provides a revealing statistical description of technical fleet characteristics and commercial/contractual approaches toward ownership and operation of MOPS units. Based on a proprietary database of existing and planned MOPS units, in-house studies, and a review of published sources, this analysis correlates fleet technical and commercial data with the characteristics and requirements of various field applications and geographical areas. Current MOPS market trends are illustrated by reviewing units recently installed or under construction. MOPS unit design and key component technologies are becoming more mature, but applications continue to show a high degree of innovation and further development of some components is needed to extend MOPS use into very deep water. Future applications will likely reinforce the present trend toward FPSOS and provide increasing opportunity for broader contractor participation, responsibility and ownership. The MOPS market will remain vital and expanding into the next century and will continue to be characterized by a diversity of technical solutions and commercial arrangements. Introduction Mobile offshore production systems (MOPS) constitute the most rapidly expanding segment of the worldwide offshore field development market. The expansion in MOPS applications that began several years ago and is still accelerating is being accompanied by great vitality in technical advancements and commercial arrangements, as well as by the entry of many new participants into the market. And while rapid growth is always disorderly and confusing, the MOPS market is beginning to mature in certain respects as the relative merits of various technical solutions and commercial arrangements are sorted out. It is no longer necessary for an offshore operator contemplating use of a MOPS to approach the selection process by reinventing the wheel. It is, however, still necessary to define what is included in the MOPS category when presenting analytical results, since different investigators hold different assumptions. For this study, mobile offshore production systems include all readily movable vessels or structures that are directly engaged in the production and/or processing of oil at an offshore field location, This MOPS universe thus includes ship-shaped monohull floating production, storage and offloading systems (FPSOS), semisubmersible-based floating production systems (FPSS), and jackup production units (JPUS). The five existing and two newbuilding TLPs and the two Spar units on order are omitted from specific consideration as having more in common with fixed bottom-founded platforms than with MOPS and in being owned exclusively by oil companies. The first TLP will conclude its 12th year of service at Hutton field this year with no indication that it will be redeployed any time soon. if operators begin toselect some of the mini-TLP designs for actual applications, these units would fit our conception of a MOPS.

The oil and gas industry finds and develops offshore oil and gas fields in three major stages: exploration, drilling, and production. Specialized engineering is required and has been applied throughout each of these stages resulting in the industry's steady advance into deeper water and more challenging environments. The advances in engineering are best seen in the structures and technologies that have been applied in the vessels designed for use on and in the water, in the new materials developed to meet harsher conditions, and in the control systems developed to guide the flow of fluids from deep in the earth, through the water column, and into the platforms and floating production systems that gather and process the production, so it can be sent to market. The engineering challenges continue to evolve, and the solutions that are developed set the stage for industry's next advance into the ocean's depths.