Offshore operators and platform fabricators have a mutual advantage 

 in having a yard ready for production soon after a commercial -si zed 

 field is found offshore; the sooner drilling and production can begin, 

 the sooner the operator can begin to earn a rate of return on the vast 

 sums already invested in lease payments and exploratory drilling. By 

 having a yard ready for operation when orders for platforms are received, 

 the fabrication firm can assure early delivery and thus can compete 

 favorably with other firms for the business. 



The platform sponsor generally, though not always, makes the decision 

 to establish a strategically located yard after a significant find has 

 been made and its development schedule has been set. 



The sponsor may speculate on future sites. Even before lease sales 

 occurred. Brown and Root purchased land in Virginia and optioned land in 

 Oregon without making a commitment on a yard. 



While the oil company is in the process of delineating the field 

 within which the find has been made, the platform sponsor will hold 

 meetings with oil company representatives to estimate the number of 

 platforms that might be needed to draw up a possible schedule for delivery, 

 and to draw up preliminary design specifications for platforms as the 

 nature of the field is determined. Other information likely to affect 

 the choice of platform type might include location of the find, the 

 seabed conditions, the depth of water, and other requirements. The 

 choice of platform type will determine the amount of lead time required 

 for obtaining steel and manpower. 



To summarize: a platform fabrication yard is usually sited and 

 planned well in advance of offshore production drilling, and the platform- 

 fabrication companies may obtain an option to buy or lease a suitable 

 tract of land well in advance of an offshore lease sale; the fabricator 

 may not act on this option until he is assured of platform orders. An 

 option allows the fabricator to proceed with environmental impact 

 statements, zoning applications, site layout, design of facilities, and 

 applications for building permits; having accomplished these preliminaries, 

 the fabricator is ready to rapidly construct the yard once a platform 

 order is received. Once an order is received economic forces and the 

 rush to develop the newly discovered field causes a burst of activity 

 with momentum that may not easily accommodate environmental concerns. 



At the time of taking land options environmental considerations can 

 be easily incorporated into the plan for the fabrication yard. The 

 ability to insert environmental recommendations continues to the time a 

 platform order is received. 



Investments : Securing an option on land and initiating environmental 

 studies and designs of yard facilities does not assure that the yard 

 will become a reality. Until the market for platforms has firmed up, a 

 new platform yard may not be constructed since at least three large 



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