Ziff Energy released the fifth edition of itsDeepwater Gulf of Mexico Reducing Field Operating Costs study, which evaluates operating costs for producing offshore fields in water depth greater than 1,000 ft. The study analyzes operating cost data for calendar year 2003, and features trend analysis on a field level.

Over time, the average deepwater field size has increased steadily. In fact, deepwater average unit operating cost fell between 1997 and 1999. Since then, the average unit operating cost has remained nearly level with a small increase between 2000 and 2003. This indicates unit costs are facing upward pressure, masked by the offsetting influence of larger field sizes. For the 13 deepwater fields tracked in both this year's study and the 2001 edition, all but three of the fields had increased unit costs, even among fields with increased production volumes.

An increased emphasis on system reliability to optimize production and continued strong emphasis on safety, health, and environmental stewardship accompanies the growth of production and facilities in the deepwater. This year's study includes metrics related to production efficiency, reliability, and uptime. The data indicate a wide variation in the metrics. For example, production time lost due to unplanned downtime ranged from 2% to 18%.

One of the lessons from the analysis of these metrics is that industry has not yet standardized on how to measure efficiency, reliability, and uptime. There is room for improvement in performance and in measuring performance for 'like kind' peer comparisons. "Study participants receive a detailed diagnostic report on each asset, comparing detailed cost items with peer assets and identifying potential savings in each cost category," Mike Erpenbeck, Ziff Energy's Project Manager, said.

The study includes ten primary cost categories, with further detail as requested by clients. The range of operating costs between 'best in class' and poor performer was greatest in the subsea satellite category, where high cost subsea fields have operating costs nine times that of low-cost subsea fields.

07/19/04