30 years of deepwater

David Paganie • Houston

Deepwater is widely considered to be the world’s most prolific, and prospective, resource play. Shelf reserves are rapidly declining and the Arctic, estimated to hold substantial undiscovered oil and gas resources, is years from providing meaningful growth to offshore production. Deepwater, on the other hand, is expected to provide incremental growth, with projects in the US Gulf of Mexico, Brazil, and West Africa leading the way.

The majors active in those regions are shifting development capital from conventional assets to more complex projects, increasing the level of risk – technically and financially. It is estimated that about $209 billion has been allocated for deepwater development expenditure for the period 2011-2015. Moreover, during the first six months of this year, the estimated total value of MODUs ordered exceeded the previous record set in 2007 (Offshore, July 2011). Nearly 70 deepwater-rated newbuild drilling rigs are scheduled to hit the market over the next few years.

Through active industry participation, conferences and exhibitions can facilitate the development of enabling technology and effective risk management strategies required for deepwater development. Deepwater Offshore Technology International Conference & Exhibition, in particular, has provided a forum for industry professionals to share new ideas and learn from each other’s experiences. DOT, first held in 1981 in Mallorca, Spain, is today led by a 35-member advisory committee that represents a cross-section of industry operators, contractors, suppliers, and service companies. For 30 years, some of the technology introduced at DOT has had a revolutionary effect on deepwater development.

Appropriately, DOT returns to the shores of the Gulf of Mexico where operators are moving ahead with multi-billion developments. Indeed, the largest discovery in a decade in the region was made earlier this year, proving the continued interest and importance of deepwater post-Macondo.

I am delighted that one of those operators – Hess Corp. – is the host of this year’s DOT. The operator brings a unique perspective to the event, given its active participation in international deepwater developments. Stan Vond, VP Development–Offshore Americas and West Africa, Hess, is scheduled to give the Keynote Address in the Opening Plenary Session.

After a short break, senior-level managers from operating companies will draw on experiences from high-profile deepwater projects:

• The Development of Cascade and Chinook Fields in Ultra Deepwater Gulf of Mexico, Mr. César Palagi, Walker Ridge Asset Manager, Petrobras America
• The Who Dat Development – Evolution of a Project from Lease Sale to First Production, Mr. Rick Fowler, Vice President, LLOG Exploration
• Perdido – First Year Production: Experiences and Learnings, Mr. Chris Smith, Perdido Operations Manager, Shell International Exploration and Production Inc.
• The Jubilee Project: Lessons Learned, Mr. Dennis McLaughlin, Senior Vice President, Development, Kosmos Energy.

The subsequent, three-track technical conference comprises sessions on subsea technology; well construction and drilling operations; production optimization; flow assurance; construction and installation; and safety, risk, and reliability, among others. A handful of the international and national operating companies that are scheduled to present in the technical program include:

• Chevron: Dry Tree Alternatives for Drilling and Production in Ultra Deepwater Gulf of Mexico
• CNOOC: Flow Assurance Challenges the Development of a Deepwater Gas Field in South China Sea
• Shell: Evaluation of Alternatives for Disposal and Monetization of Associated Natural Gas – Deepwater Brazil.

And, for the first time, DOT is offering the Offshore Risk Management Forum, which is integrated into the technical conference. It covers political and regulatory considerations, drilling safety, contract risk and insurance issues, and effective crisis management.

I encourage you to attend this year’s DOT and engage with your industry colleagues to promote the continuing advancement of technology and practices for safe and effective deepwater development.

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