Deepwater exploration and production initiatives

By Jerry Greenberg, Houston

More than 100 deepwater discoveries (1,000 ft of water or greater) were announced during 1999 and 2000. More than 100 deepwater development projects are presently under study or planned worldwide as a result of those and earlier discoveries. And, nearly 50 subsea projects are planned as well.

There are ample opportunities for future deepwater exploration around the world. In addition to deepwater offerings in the US Gulf, there are around 40 licenses held by foreign operators in Brazil in water depths from a few hundred feet to over 11,000 ft. Operators hold licenses offshore Australia in depths to 9,500 ft, and recent licenses off Equatorial Guinea generally range from 8,000 to more than 10,000 ft depths. Deep offshore contract areas of other African nations have also approached 10,000 ft.

Several initiatives aimed at deepwater exploration are nearing conclusion, and several suppliers and drilling contractors are developing new composite, alloy and thin walled risers.

Dual gradient drilling systems
The Conoco/Hydril-led SubSea MudLift Drilling System JIP will be completed this summer following field tests on a Texaco well in about 900 ft of water in the Gulf of Mexico using Diamond Offshore's New Era semisubmersible. The JIP, which began in 1996, initially was to include four phases. However, the third and fourth phases were consolidated, and a dramatic, simplifying design change advanced the original schedule approximately a year.

Following the tests, the JIP hopes to have the system commercially available by yearend, with delivery 14-16 months after the order. JIP participants will have first availability.

The Diamond Offshore New Era will drill the world's first dual gradient well.

"One of the reasons it takes so long to design and build a system is every rig's layout is different," said Kenneth Smith, project manager of the SubSea MudLift Drilling JIP. "The subsea pumping system has to be properly integrated into the BOP, LMRP, and riser system."

"As a practical matter, once these systems are on a rig they won't be leaving it for a few years," Smith said. "It's just too expensive to install and remove it."

With the SubSea MudLift system, drilling mud is removed from the riser and it is filled with seawater, reducing riser loads and allowing for more riser to be used for ultra deepwater drilling. With the mud in the riser removed from the top of the well, fewer casing strings are required, as well, making it is easier to reach the geological objective in deepwater. Consequently, designing a deepwater well with the SubSea MudLift system becomes essentially the same as designing an onshore well.

While not commenting on the cost to design, build, and install a dual gradient system, Smith said it is "expensive and will vary from rig to rig. Until this technology is proven and people become comfortable with it, I believe there will be some difficult negotiations."

JIP participants include BP, Chevron, Conoco, Texaco, Diamond Offshore, Global Marine, Schlumberger, and Hydril (the project designer).

DeepVision, another JIP investigating dual gradient drilling systems, includes Transocean Sedco Forex, Baker Hughes, BP, and Chevron. It is expected to be available for orders by August or September this year, with delivery of a full system in approximately 18 months, including a three-month testing period at the end of the time frame.

Instead of conducting a full field test, all critical elements will be tested in a flow loop during a four-month testing period. The company is testing each component to the pressures expected in deepwater and ultra deepwater environments.

The SMD Field Test System is undergoing factory acceptance testing now.

"We will hook up the pump in a water-filled tank and pump through mud with sand to test and verify erosion and wear," said Gier Sjoberg, project manager for DeepVision at Transocean Sedco Forex. "We will also pump through cuttings, pieces of metal, and cement, and test for gas."

The system is estimated to cost US$30-$40 million. DeepVision will own the systems and lease them to oil companies or drilling contractors. (The SubSea MudLift Drilling System may also be available in a leased arrangement.) DeepVision will provide the required services including engineering and planning assistance and operation.

Other initiatives
Several other projects involve lightweight risers. ABB Vetco Gray is testing two composite riser joints. Noble Drilling is developing an alloy riser said to contain aluminum that is about 40% lighter than a typical steel riser. Two joints were to have been tested offshore Brazil earlier this year but haven't been yet.

Additionally, Transocean Sedco Forex designed a thin-wall riser that will save manufacturing costs, but the real benefit would be to reduce the variable deckload. The standard thicker-walled riser joints will be at the top and bottom of the riser string because they receive the highest stress loads. The thin-walled joints will be installed in the middle area of the riser. Transocean's Sedco Express class semisubmersibles will utilize the thin-wall riser joints.

US, Angola top deepwater discoveries
The US Gulf of Mexico topped the list of discoveries the past two years with 41 of 124 announced discoveries—nearly 25% of them at water depths greater than 5,000 ft. Angola was second with 24, with more than half (13) in waters 4,000-5,000 ft deep. Indonesia was third with 14 deepwater discoveries, according to figures supplied by OneOffshore.

There are presently 128 deepwater development projects under study worldwide, half in the US Gulf. Again, Angola is second with 16, then the number of deepwater development projects under study drops quickly to eight in Norway and seven each in Australia and Nigeria, with several countries posting one or two.

US projects
A few more US Gulf deepwater discoveries were announced during the first quarter this year. Companies announcing discoveries last year, according to OneOffshore, include Anadarko (4,300 ft), BP (6,675 ft), EEX (2,518 ft), Kerr-McGee (several in approximately 3,100 ft), Mariner Energy (5,600 ft), and Vastar Resources (4,642 ft).

There also were several "new" discoveries in BP's and Exxon's Crazy Horse prospect that were drilled in 2000. One, Crazy Horse North, is expected to begin production by 2005 from a floating production facility capable of producing 250,000 b/d. Exxon also holds several blocks in the Hawkes prospect north of Crazy Horse and plans to begin exploratory drilling during the second quarter 2001.

Deepwater discoveries announced so far this year include Murphy Oil Corp.'s Front Runner in about 3,500 ft of water. A subsequent well on the northern portion of the prospect is being drilled and will be sidetracked to evaluate the southern portion of the prospect.

10 Esso discoveries off Angola
ExxonMobil affiliate Esso Exploration Angola recently announced its 10th oil find on Block 15 in 2,790 ft of water. Multiple developments are planned with first production scheduled for 2004.

Elf Exploration last year announced its 10th discovery on Block 17 offshore Angola in 2,600 ft of water.

Also offshore Angola, Angola Drilling Company (ADC) will charter Oceaneering's FPSO Ocean Producer for seven years to develop the Canuku Area of Block 3 for Songangol. The vessel is already working for Sonangol under a contract set to end in April 2001. It is expected to arrive at the ADC location early in the third quarter 2001.

Other West African countries are finally getting in on the deepwater boom. Kerr-McGee, for example, late last year acquired a 100% working interest in the 2.5 million acre Block 4 offshore Benin in water depths of 400-10,000 ft. The license covers essentially all of Benin's deepwater area. Additionally, TotalFinaElf this year signed an exploration agreement for the Olonga Marin Block offshore Gabon in water depths approaching 11,500 ft.

Deepwater production plans
BP is progressing on several of its deepwater Gulf of Mexico projects, lining up vendors under various service and supply contracts. FMC Corporation is to provide subsea systems and related services, including trees, controls, manifolds and well connection systems. First equipment deliveries are expected to begin in late 2002.

BP also awarded a contract to CSO Aker Maritime calling for up to five spars and mooring systems with the first scheduled for delivery in 2003. Water depths range from approximately, 4,000 ft to 6,000 ft.

Additionally, CSO Aker Engineering was awarded a five-year contract covering subsea system integration and design engineering for BP's US Gulf deepwater development program, covering conceptual and detailed engineering and procurement and installation support for all subsea equipment and risers.

A deepwater pipeline project of TotalFinaElf (operator), BP, Pioneer Natural Resources, Marathon, and Mariner Energy will, when complete, set a new world record for deepwater production. The dual 12-in diameter system will gather natural gas from three fields in water depths ranging of 6,700-7,300 ft and transport it to a production-handling platform in shallower water. Production is scheduled to begin in mid-2002.

For a look at the movement toward ultra deepwater by author Greenberg, click here.

For an analysis of how expandable tubulars are aiding deepwater E&P, click here.

For a new means of preventing hydrate formation in deepwater pipelines, click here.

[Editor's Note: Oil and Gas Online has scores of articles in its archives on the deepwater plays around the world mentioned in this article. To find those that interest you, use the Archive Search on our News page. – Dev George]