Where is the offshore oil & gas industry going?

Hydrocarbons are here to stay. They are in abundant supply. The amount that consumers require will affect its price, which in turn infuences the industry's focus on new technological developments.

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Needs evolve as waters get deeper

James M. Pappas
RPSEA

Congratulations toOffshore magazine on its 60th year anniversary, and thanks for informing industry and sharing much needed information with so many individuals throughout its life.

When one tries to forecast the needs of a society as they relate to a business such as ours we must first step back and take a look at where we have been. The offshore oil industry has been a part of our lives at least since the early 1900s, when fields were developed around Baku. The industry has a long history of adapting conventional onshore equipment and techniques to the offshore environment in its quest to find and produce new reserves. As we have moved further from land into the uncharted territories that are now reaching beyond 200 mi (322 km) in distance and 10,000 ft (3,048 m) in water depth, our industry has found itself at several technological crossroads. Equipment and procedures that heretofore were adequate now no longer are good enough to use in this strange, new environment. As we set our sights on harsher environments such as the North Sea or Arctic, we found that Mother Nature has trumped all of our conventional techniques.

So, we have evolved to meet these challenges. In so doing, we have developed many unique and reliable tools to search for, find, and develop resources in all corners of the earth. While these new tools serve a useful purpose, by the nature of their uniqueness, we have lost the ability to standardize and the costs associated with our tasks have dramatically risen. To top it off, even with the best of intentions to make our business as infallible and risk averse as possible, we continue to deal with problems and issues related to the lack of safety or threats to our environment. While that is to be expected when one moves into unchartered territory it is simply not acceptable when it comes to the business of extracting energy for the masses. Everything that industry develops and uses must be done with safety and environmental protection in mind as the top priority.

With that in mind let us now turn to industry needs, and there are many.

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Overview of representative sample nanotube wire through SEM images. (Courtesy of NanoRidge Materials)

Current needs

At the top of any list is the most pressing and difficult need, the human – machine interface. It is the one area in which we have the least control. Industry must redouble efforts to understand how humans interact with the various processes and equipment. We need to understand what drives people to make decisions. We then need to ensure that those decisions are sound, reliable, and repeatable. This issue revolves around behavioral science. It delves deep into the psyche of the mind and is strongly attributable to human attitudes, values, and beliefs. It is not about nuts and bolts or rocks and fluids; it is much more complex. Our decisions rely on our abilities to process information. While those abilities are a function of training, experiences, and/or education, they are equally a function of our behavior, which comes from our values and motivations. The human factor approach needs to reach into every aspect of our business, including the development of new technologies, to effectively mitigate risks that we might unknowingly insert into a situation when we decide whether or not, or how to act or react.

Turning to more recognizable or traditional oilfield needs for the offshore environment, we come to the quandary of distance. Offshore fields are further from land than ever. Consequently, industry must develop an economic way to find and transport resources back to land. To reliably do so requires equipment capable of operating in waters that may be up to 12,000 ft (3,658 m) in depth.

We need floating facilities, both large, hub-like structures with drilling and production capabilities, and smaller structures for extended tests and one-off fields. They must be able to withstand the harshness of storms and hurricanes and function as flawlessly as those currently indeepwater use.

The subsea production factory is real. Subsea production will need to be processed and separated at the seabed. Crude oil will require pumping and natural gas will need to be compressed to travel hundreds of miles to downstream facilities. Depending on the need for pressure maintenance, saltwater may be reinjected into the reservoir or into a disposal zone, or it may be discharged at the seabed. Chemical reservoirs must be designed and constructed to residesubsea. They will need to be refilled periodically. These containers will house corrosion, asphaltene, and paraffin inhibitors, as well as other fluids that may include hydraulic fluids, all to be used as necessary. Ultra-reliable sensors and monitors must be developed to run all of this equipment and to shut it down at the first sign of trouble. In fact, sophisticated smart monitors will be developed that predict failures and provide automatic bypasses or solutions in advance of problems.

To power all of this long-distance hardware, industry must develop fail-safe, low loss power equipment. While debate rages on the pros and cons of AC versus DC current, industry should standardize for cost and safety's sake. Meanwhile, new technologies should continue to pursue nontraditional approaches to power supply. One such approach that shows much promise uses carbon-based nanotubes to more efficiently transport power across long distances. While it is too early to tell if this technology will bear fruit, its success may change the way power is transmitted across long distances by leaps and bounds.

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Design and components of at-the-bit gyroscope prototype module. (Courtesy of Laserlith Inc.)

Another area in need of additional understanding is theArctic. Because of ice and extremely cold and harsh weather the equipment we use in temperate areas cannot be employed. We have a limited understanding of ice movement and its effects on shallow soils and clays, and our ability to predict ice movement provides little lead time for reaction. Once we gain sufficient knowledge and understanding about ice, only then can we properly address its effects on floating and subsea equipment. In the meantime we must rely on empirical data, over-estimations, and a small body of information to design and construct equipment for the Arctic. Because we lack sufficient information and knowledge, industry must move deliberately when working in this vast environment, which may hold greater than 20% of remaining worldwide reserves.

From a subsurface standpoint, industry has advanced at a fast pace thanks to advances in electronics, computational capabilities, high hydrocarbon prices, and the onshore boom associated with shales. However, industry can do better.

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VSP tool re-deployable array deployed into a well which starts vertical but deviates to horizontal. (Courtesy of Paulsson Inc.)

We need tools that reliably see past the bit under drilling conditions and that can instantaneously determine reservoirs, fluids, and characteristics. As we chase after smaller, more complex reservoirs it is imperative that we have the ability to decipher data and take advantage of "point-the-bit" technology.

Zonal isolation continues to be a challenge. Industry needs tools that positively ensure that cement is properly placed and is sufficient to form a seal throughout a well's life. Similarly, tools that continually provide reservoir data and that can allow us to selectively produce and optimize production from wellbores, including advancing multi-lateral technologies, will go a long way to improve productivity and reserve recoveries.

Improving reliability and life of downhole production tools and production enhancement equipment continues to challenge industry. While some piecemeal advances are being made, many operators simply choose either to duplicate equipment or eliminate it altogether because of unreliable history. This area may require a breakthrough technology, which might come from nanotechnologies.

We have seen improvements in successfully finding oil and gas in the offshore environment from a reservoir standpoint. By some accounts the offshore industry now enjoys greater than a 50% probability of success when drilling for a new reservoir. Some of these improvements have been attributed to advances in seismic technology and MWD/LWD. However, we opened vast new plays around the world in the last decade, and hot, new plays traditionally shift the probability of success curve to the right because low-hanging fruit typically is picked early. It is possible that our increased success is at least partially serendipitous in this regard. There is still work to be done.

There are far too few enhanced recovery operations offshore. Industry continues to leave too many reserves behind after economic primary recovery has been achieved. We need ways to take the successes and best practices learned onshore into the offshore arena. Secondary and perhaps tertiary recovery processes will be necessary, especially in less permeable reservoirs, but heterogeneity and compartmentalization will have to be addressed.

Newly improved seismic techniques and breakthroughs will continue. These measures will find and differentiate much smaller and thinner segments than now, allowing better definition and reducing chances of leaving bypassed reserves.

Technology coupling seismic with reservoir completion will be ever-increasing and improved logging data will result in better resolution and understanding of reservoirs and productivity in real time.

Serious progress will be made in weather prediction over the next few decades. Man's chief limitations have been the lack of long-term data collection and computational deficiencies, areas time and efficiency improvements are eliminating. Already, some in industry believe that they can improve storm size, strength, and location predictions using early time storm attributes. However, the calculation period takes longer than the time required for the storm to reach facilities and land. Industry needs faster computational capabilities to support these efforts. Then these theories can be put into practice and perhaps replicated around the world.

Loop and eddy currents remain enigmatic. Industry can bracket possible times of strengthened currents, but does not comprehend these currents well enough to avoid them altogether. Nor have we conquered the cause and effect relationships between worldwide metocean events such as El Niño, cyclonic activity, and subsurface currents. And what about major catastrophic events: How are they influenced or how do they influence ash from a major volcanic eruption, earthquake or tsunami? Can there be a causal effect between any of these activities and air emissions or pollution? Much research still needs to be performed to even begin to understand climate and oceanographic behavior.

High-pressure/high-temperature issues must be addressed in all aspects of the E&P industry. From downhole equipment and drilling and completion fluids, to subsea and topsides equipment, increasing pressure, temperature, and water depth have required larger, heavier equipment. We are to the point where industry needs alternatives rather than to just building things with larger jackets. New materials, perhaps from nanotechnology and most certainly from composites, must be used to keep sizes and weights from increasing. New fabrication and connection techniques must be developed. Some subsea HP/HT equipment needs to be redesigned and engineered to function in deeper waters.

Long term

Whenever someone prognosticates about the long term I ask myself if that person has a motivation or an angle. What does he gain by exposing himself to second guessing and possible ridicule for publicizing his opinions? So, with apologies to those who don't gamble, here are my two cents:

  • Hydrocarbons will continue to be found in deeper waters, farther from land. Beyond 10 years industry will begin to routinely find reserves in up to 12,000-ft waters. It is conceivable that reserves may be discovered in up to 20,000-ft depths, once industry solves its near-term problems.
  • Gas hydrates are real. While gas is abundant today, there will come a time when supply cannot keep up with demand. The prize here is too large to ignore. Natural gas will be the next biggest energy source, and hydrates will make it affordable for many. Work being done today shows promise. Only a triggering mechanism is needed to incite much greater use of gas, and while shale gas currently is in large supply, at some point it will fail to meet demand.
  • That triggering mechanism may come from climate change. Like it or not, and whether or not you even believe in it, we have to deal with the fact that most people in our world do believe climate change is occurring. And many believe that burning fossil fuels – indeed the byproduct of industrialization – is a major culprit. Therefore fossil energy will be taxed. Consequently, technology will be developed to measure and capture emissions. Some enterprising person may actually find a way to turn byproducts into money.
  • Robotics and smart equipment will eventually be fully accepted by our industry. Instead of computerized systems spitting out data or suggesting changes for optimization, humans will watch over equipment and second-guess it. These technologies already infiltrating our industry, and will continue to make inroads. As system integration becomes more complex and difficult, we will have to rely on our tools to make decisions for us.
  • The environmentalist's dream is "out of sight, out of mind." Many years from now that will be the case for our offshore environment. Everything – drilling, production, storage, and transportation – will reside under water. It will be largely unseen, protected from Mother Nature's storms and other calamities, and able to reliably and effectively deliver product to land.

Final thoughts

Hydrocarbons are here to stay. They are in abundant supply. The amount that consumers require will affect its price, which in turn influences the industry's focus on new technological developments. At some point other sources of energy will compete will oil and gas, but it is hard to say when. The economic engine that runs the world will continue to be based on energy, and oil and gas will be major contributors under any realistic scenario for many years to come.

About the author
James M. Pappas, P.E., is Vice President Ultra-Deepwater Programs, RPSEA (Research Partnership to Secure Energy for America).

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