Low-cost options for marginal and mature fields
William FurlowDeepwater opportunities are a function of depth, multiplied by research time and cost, divided by budget (sometimes a pledge of the entire company's assets). Generally, there are substantial opportunities for companies with $500 million to $1 billion to spend in ultra-deepwater exploration and development.
A number of contractors and manufacturers have designs on the drawing board for mobile drilling units, risers, and other similar equipment that can be used in the 10,000-13,000 ft water depth range, knowing that operators will exhaust those prospects in the 6,000-10,000 ft water depth range in the decades to come.
With recent advancements in synthetic drilling fluids, lightweight risers, and riserless drilling, the connection between the surface and seabed is being altered to cope with the severe forces anticipated for depths beyond 6,000 ft.
However exciting this ultra-deepwater research and planning may be, in terms of where technology will take the petroleum industry in the next year, it is about as relevant as space travel in the 1960s. Just because the aerospace goal was met didn't mean that mankind was ready to colonize the moon.
Technology for 1998The point with regard to research for the future is that most producing companies, despite what they won in any recent lease sale or license round, will not have the resources to explore in 10,000 ft. of water, or finance the research needed to produce anything they find.
The future for the vast majority of smaller integrated producers, national oil companies, and independents lies in the frugal application of recent technology. It may not be as exciting as exploring off the shelf, but 3D and 4D seismic, fluid inclusion research, enhanced recovery, and multilateral or extended reach drilling are opening up an entirely new play in conventional water depths. Wells previously abandoned as depleted or dry are being re-entered at low cost and re-completed at a profit. These fields already have the infrastructure in place for production and simply await the technology needed to find what others missed.
Add to this mix, the new finds being made on the Gulf of Mexico outer continental shelf, thanks again to enhanced seismic and enhanced recovery techniques, and one gets a clear picture of where the short term money is going to be made. Cutting edge technology doesn't have to be used at the edges of knowledge and performance. These same techniques can be applied to water depths anyone can reach, provided they can find a rig, and can produce marginal fields at a profit.
Across the US Gulf of Mexico, which often tends to be a bellwether for trends in other producing areas, independents are applying high-tech geophysical and borehole techniques to exploit wells that 10 years ago would not have been economical. Small, efficient production units such as mini-tension leg platforms and spars, require fewer workers, are more automated, cheaper to build, and are reusable. These systems affect the bottom line enough to make what was once a write down into a 20-year prospect.
A good example of the potential now being enjoyed is the one of the oldest stories in the Gulf of Mexico, the Kerr McGee Ship Shoal Block 32 Field. This is not just an old field, it was the first drilled out of the sight of land, 50 years ago. In 20 ft of water, the platform was state of the art back in 1947. Even so, a quick workover last spring and a new production platform brought the field back on line at 300 b/d, with an investment of less than $1 million.
Man and dogAs unlikely as it seems, there is a common joke about the production crew of the future consisting of a man and a dog. The man's job is to feed the dog and the dog's job is to make sure the man doesn't touch anything.
Further automation offshore is no longer a joke. With high insurance and legal exposure for offshore workers, and more sophisticated drilling and production monitoring systems, it makes economic sense to replace people with machines when possible. While this may mean fewer workers on the drill floor, it may mean greater opportunity for those who choose a career offshore.
Increased automation and technology means workers must be better trained and have a wider range of skills. Also, it means more redundant systems and fewer opportunities for operator error. Long-term, there is the possibility of running an entire production operation (and even some parts of the exploration process) by remote control using smart drilling and a computer interfaces that can track the bit in relation to detailed seismic data.
In the meantime, what this means is smaller crews who have more skills and a broader understanding of the overall operation.
Lower cost fluidsThe changes in drilling fluid composition and chemistry are symbolic of what is happening all across the technology spectrum in drilling and development.
Drilling fluids are enjoying their own renaissance, due in part to increasing technology and demands from high temperature/high pressure wells. The new generation of synthetic drilling fluids can cost as much as $800/bbl. While there is no denying the benefits of these fluids, the price can often be a deal breaker. Rowan Drilling designed its new Super Gorilla Class jackups with dual mud systems, in order to supply to supply the driller with mud options.
As in other technical solutions being introduced and on the drawing boards, prices are already dropping on the most expensive mud systems. Dr. Jim Friedheim, manager of new technologies for MI, said that prices are dropping to $200/bbl from $400/bbl. The price drops are due in part to the use of new ingredients in synthetic fluids, a practice hampered by vacuous EPA standards in the US and strict regulation in the UK. Friedheim said the UK has all but outlawed synthetics in the North Sea, although Norway is still on the fence about this issue. In the US, it is the lack of regulations that frustrates wellbore design.
Friedheim said linear paraffin shows promise as a cheaper alternative for the creation of synthetic fluids, but without regulations covering the discharge of such fluids it is difficult to proceed. Friedheim said such regulation was supposed to be on the books by last October, but to date has not been written. Without these guidelines it is difficult to pursue a new design because there is no way to know if the materials will be allowed under the new regulations. The debate over the use of linear paraffins surrounds the fact that they do not contain double bonds, which may or may not affect how they degrade on the sea floor.
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