Thunder Horse South Expansion illustrates industry trend

April 12, 2017
Cost efficiency remains a top priority in offshore oil and gas operations as companies rethink field development and asset management.
David Paganie Houston

Cost efficiency remains a top priority in offshore oil and gas operations as companies rethink field development and asset management. As such, subsea tiebacks and expansion projects are gaining momentum. These development approaches can capitalize on the plethora of existing offshore infrastructure with spare production capacity. Meanwhile, service and supplier costs are still favorable.

BP’s Thunder Horse South Expansion project illustrates this trend of leveraging existing infrastructure to maintain production. This month’s lead feature editorial, by Sarah Parker Musarra, Editor,Offshore, provides a comprehensive review of Thunder Horse South Expansion with comments from BP’s project manager, Steve Raymer.

BP turned the taps on at South Expansion in December 2016, bringing the project onstream 11 months early and $150 million under budget. Richard Morrison, regional president of BP’s Gulf of Mexico business, said that the project’s achievements showed the effectiveness of its regional strategy, which he explained was “all about increasing production from within our existing asset base and large portfolio of undeveloped resources.”

The project saw the addition of a second drill center about 2 mi (3 km) away from the existing site of the operator’s Thunder Horse facility, and is expected to increase production by up to 50,000 boe/d (gross). The new production system is a collection point for several new and existing wells to be connected to the platform by two 11,000-ft (3,353-m) flowlines, which were installed on the seabed in late 2016.

BP said that the project’s first new well tapped into the highest amount of hydrocarbon-bearing sand seen to-date at the Thunder Horse field, with a confirmed 500 ft (152 m) of net pay.

“I think South Expansion is a perfect example of how big deepwater projects can be economic in a low price environment if we design them in a smart and cost-effective way,” Steve Raymer said.

Musarra’s full report beginshere.

Digital transformation

Another top priority in offshore oil and gas is advancing digitalization as a means of improving efficiencies and reducing the cost of operations. Full implementation could result in a more operationally efficient, cost-effective and adaptive industry designed to deliver value regardless of market conditions, writes the author of this month’s Beyond the Horizon, Fay Shong, Global Oil & Gas Digital Leader, EY. Shong says the industry has a unique opportunity to set the standard for digitalization of the value chain, and it should revolve around connectivity in two areas: assets and operations; and the value chain. The initial two phases of digital integration, she explains, should focus on connecting field assets and equipment to the Industrial Internet of Things through the use of sensors that provide automated monitoring and diagnostics.

Shong’s article beginshere.

Earlier this year, DNV GL released a report that assessed the needs and challenges that have been brought on by this digital transformation. The report,Industry Perspective: Digitalization in the Oil and Gas Sector, found that there is considerable variation in the degree of action being taken by key players. This is due to the downturn, but also driven by the lack of clarity on the cost-saving potential of digital technologies. The greatest potential for value creation, the report suggests, lies in the opportunity to reduce costs by optimizing day-to-day operations and by creating a safer and more sustainable business.

Saudi Aramco’s drilling department is capitalizing on the benefits of digitalization by implementing a new, automated system to capture and analyze sensor data from all of its rigs. An update on the project with results by Musab Khudiri, Saudi Aramco, and Muhammad Kashif, Petrolink International Ltd., beginshere.

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