Billions of dollars are being spent on exploration and production in the Asia-Pacific region. Expanding economies in Malaysia, India, China, and all of Southeast Asia are creating enormous demand for oil and gas. As a result, offshore exploration and development activity in the Asia-Pacific arena is rapidly increasing beyond all historical levels.

E&P goes deep

Today, the Asia-Pacific region leads the world in offshore exploration and will continue to do so through 2009, according to Mackay Consultants, of Inverness, Scotland.

Asia is experiencing unprecedented growth in activity driven by local expanding economies and increasing demand for oil and gas, the company says. Mackay expects the region, in combination with the Middle East, to account for over 60% of the overall increase in offshore gas output.

Southeast Asia will also lead the world in total offshore spending by 2008, lead the world in offshore production spending by 2009, and will be second in the world in offshore development spending by 2009 (led only by North America), Mackay says.

The amount of money being invested in deepwater exploration in Asia’s offshore is steadily growing.

In an analysis of deepwater activity at the close of 2005, John Westwood, managing director of Douglas-Westwood, said the growth trend for deepwater will remain strong over the next four years, reaching an annual total of over $20 billion by 2010.

“Between 2006 and 2010, expenditure in the deepwater sector is projected to expand at a compound annual growth rate of 7.3%, with particularly strong growth coming from the Asia and Latin America regions,” Westwood said. “The ‘Golden Triangle’ of deepwater, namely the Africa, Gulf of Mexico, and Brazilian areas, will still account for 85% of global deepwater expenditure over the forecast period, but the rapid emergence of Asia as a significant deepwater region should not be overlooked.”

Examining growth constraints

Asia is a dynamic region for E&P, and its growing impact on the oil and gas industry deserves serious attention.

Offshore magazine will direct the world’s attention to the region at the second annual Offshore Asia (OA) Conference & Exhibition in Kuala Lumpur, Malaysia. OA will run from Jan. 16 through Jan. 18, 2007, in the Kuala Lumpur Convention Centre. Over 1,000 people and 60 exhibitors are expected from the energy centers of the Asia-Pacific area, including Malaysia, Singapore, Thailand, Vietnam, Indonesia, China, Australia, New Zealand, and India.

The theme of OA, “Managing E&P Growth with Limited Resources,” opens the door for discussion on the topics of the latest advances in deepwater exploration and production.

OA will feature presentations on key issues impacting Asia-Pacific E&P activity. Technical focus areas for this year’s conference include:

• Expanding Asia-Pacific E&P activity
• Local content/technology transfer
• Recruiting, training, and retention
• Field development - lessons learned
• Field architecture and economics
• Economic and geographic trends
• Well construction/petroleum technology
• Offshore construction/installation
• Deepwater operations.

The event also offers panel discussions that focus on doing business in Southeast Asia, project planning and execution, and future plans of national oil companies.

The following summaries are representative of the papers that will be presented at OA this year.

The development scheme for deepwater fields is evolving rapidly. In this evolution, contractors in the business of leasing FPSOs are playing an important role. Operators have clearly acknowledged the considerable added value brought to their projects by the contractors. This added value covers technical innovation, schedule, and operations and results in significant cost benefits.

Thanks to the success of the first leased generic FPSOs offshore West Africa, the concept has become very popular among the oil companies, which have used FPSOs even for field developments requiring very large topsides capacity.

A new challenge is now ahead of us. The concept of leased FPSO can be extended to complete field developments. The Single Buoy Moorings group of companies has mastered the technology for complex field developments. The company is able, for example, to associate subsea and surface wellheads and floating production units of a different nature. In-house expertise embraces the complete set of floating production units: FPSOs, tension leg platforms, semisubmersibles, offloading buoys, and for shallower water applications, self-elevating units. This expertise also includes the fluid transfer line systems that link the different floaters that can be present on a given field.

The first part of this paper presents the recent FPSO industry trends, highlighting the increase in water depth and in production capacity and complexity. It shows how leased FPSO contractors have contributed to successful deepwater field developments offshore West Africa and Brazil and soon, offshore Malaysia.

The second part of the paper describes the new concept of full field development contractors, focusing on areas where operators are expecting the largest benefits. The paper also addresses a key factor of success in facing this new challenge - building high-level expertise for the long term next door to the decision makers.

Risk-based integrity management of flexible risers has become standard practice in the North Sea since its introduction 10 years ago. This process using the “failure driver approach” has a strong track record and is currently being adapted for use on steel risers. Recently reported failures of flexible risers in the Australasia region provide incentive for ensuring that integrity monitoring or inspection methods exist that are capable of prevention or early detection of such problems.

Steel Catenary Riser (SCR) technology is rapidly expanding as a riser solution. With recent widespread application to production service, higher motion facilities, pipe-in-pipe and clad pipe service, increased water depth, and HPHT applications, safety critical production and export SCRs are operating under increasingly challenging design conditions.

The paper presents the evolution of the results of the work that facilitate a pro-active approach to integrity management, shared operator experience and a risk-based integrity management methodology for flexibles and steel risers.

As the need to develop oil and gas reserves extends into ever increasing water depths, the challenges associated with the flowlines and risers also increases. This is particularly the case for the Asia-Pacific region which is rapidly becoming a deepwater frontier area with the additional challenge of few deepwater construction assets and experienced deepwater personnel.

This paper highlights and discusses the challenges associated with deepwater risers and flowlines, concentrating mainly on construction and installation. The paper takes a detailed look at the specific challenges of working in the Asia-Pacific deepwater frontier.

The design and operation of offshore waterflood water injection systems must not only consider the steady state, but also transients introduced during both normal operation and shutdowns. Shutdowns and startups can cause hydraulic transients (i.e. water-hammer, pressure surge) that the operators might not anticipate.

Planning for and mitigating the transient behavior requires sound knowledge of the steady-state operating envelope and the system’s design limits. Steady-state parameters such as total injection rates, number of injection wells, topsides and wellhead injection pressures, topsides and subsea choke positions, and pump operating points need to be fully reviewed for all expected field conditions. These parameters constitute the baseline from which transient events cause a dynamic change in the flow and pressure of the system. A pressure surge can be caused by transient events such as fast closing valves (“fast” with respect to the characteristic time of the system), pump(s) startup or speedup, and system startup (“packing” the injection lines). Low pressures or vacuum can also result from events such as pump(s) trip and valves closing with inadequate backpressure.

These transient events can cause piping to exceed design pressures, can cause flexible piping to collapse and plastic type liners to disengage, can result in cyclical stress loading on the piping system, and can damage delicate instrumentation.

A detailed hydraulic analysis with special emphasis on transient behavior can provide water injection system operators with critical knowledge of the system’s behavior under varying conditions. The engineer undertaking such an analysis must clearly understand the system’s design and operating procedures (including equipment specifications and control logic), conduct a risk assessment of potential transient events, and complete a thorough parametric analysis of each transient causing event and combinations thereof.

This paper explains how an analysis should be carried out to adequately mitigate risk.

As Murphy Oil Corp. develops assets within Malaysia and develops fields like the Kikeh deepwater development, support infrastructure is required to expand in support of the existing work scopes and the envisioned peak activity anticipated during development drilling, construction, commissioning, and production activities associated with this field. With a limited number of service providers available for this type of function, pre-planning expansion will be key to the success of these projects.