Gyrfalcon subsea development forges new business approach

First 15,000-psi subsea tree in US Gulf

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Gyrfalcon is the first 15,000-psi subsea well in the Gulf of Mexico.
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The recently completed Gyrfalcon subsea development project set a record in the Gulf of Mexico and may offer insight into the future of marginal field production. As the majors set their sights on giant fields in ultra-deepwater, more marginal fields will be shed. This is good news for those independents able to translate contractor experience and innovative project management into up-front cost savings. The key to success will be a clear understanding of risk management.

Gyrfalcon began life as a Shell project in 1997. Drilled in Green Canyon Block 20, in 880-ft water depths, it was originally called the Shorts Field. In late 1997, Total Offshore Production Systems (TOPS), a subsidiary of R&B Falcon specializing in turnkey subsea developments, began discussions with Shell to develop the field.

In the course of these discussions, Reading & Bates Develop ment Co. (Devco), another R&B Falcon subsidiary agreed to farm into the field, with Shell retaining a net profits interest. TOPS proposed to do the development for Devco under a lump-sum turnkey-based contract. TOPS' plan was to use existing components to develop the field quickly, and at a lower cost. TOPS and its preferred suppliers focused on a low-cost solution, rather than an innovative solution, with far-reaching research and development. Shell would handle the production through the Boxer platform and pipeline system.

Low-cost driver

With the focus on a low-cost solution, Reading and Bates crunched the numbers. Bob Byers, Director of Oil and Gas Properties for R&B Devco said having parent company ownership in TOPS helped drive home the need to turn in the project under budget. He was able to work with the team at TOPS to develop a lump-sum turnkey scenario. Once project target costs were developed, TOPS went to its list of preferred vendors and worked the costs and cost structure in detail.

The key to the success of this project was the low-cost and dependability associated with using simple components that could be upgraded to meet the requirements of Gyrfalcon. In particular, according to Richard Trevitt, Director of Projects for TOPS, the Cameron tree used on Gyrfalcon was based on an existing 10,000 psi rated design.

There was no money to build in redundancy. Instead, the team focused on reliability. Trevitt said redundancy is a popular solution when there is a wider profit margin on a project, but the thinking on Gyrfalcon was that redundancy may or may not make the component more reliable, but absolutely will increase the complexity and the cost of the component.

Along these same lines, simplicity was the watchword. This was a single well subsea tieback. Trevitt said vendors were asked to focus on what was required to develop the field, and not what it would be convenient to have. This was a faster way of doing things and the up-front cost was less.

Byers said this was an interesting exercise. There was no time for change orders, so everything that was needed in a component had to be in the original design. After evaluation of necessary functional, safety, and environmental requirements, decisions were reached to leave most optional components and features out and then stick with those choices down the road.

The product was a fit-for-purpose system, safe, reliable, and environmentally sound, but with virtually no "bells and whistles." He said the options the team eliminated resulted in significant cost savings. The knock-on costs for many of these items had never really been evaluated because the need for the components was a given in the design basis.

The savings associated with eliminating a valve, for example, is not worked from a total, systems-cost point of view, because it is a part of the fundamental assumptions of the project. On Gyrfalcon, the approach was to take everything out of the formula, then re-introduce components when the need was established.

Design components

Byers said vendors were able to adapt to this approach, and were candid with R&B. For example, Byers said TOPS and Cameron came to him and explained in detail what the tree would do and what it would not be able to do. The 15,000-psi tree that Cameron envisioned was a marinized version of a mono-bore 15,000-psi surface tree it already had designed, incorporating features of a previous 10,000-psi subsea tree design. One of the more challenging portions of the project besides the tree, according to Trevitt, was designing the subsurface safety valve. This required one of two things:

  • Develop a flying lead and umbilical that could handle 17,500 psi
  • Come up with a 15,000-psi rated dome-charged safety valve.

Camco came up with the dome-charged valve, allowing the pressure requirements for the umbilical to drop to around 5,000 psi. Trevitt said he never doubted Camco would come up with the design, but the real challenge was to do it in the time and for the money the project allowed.

The three miles of steel tube umbilicals that tied the well back to Boxer were designed by Duco, a subsidiary of Coflexip Stena Offshore. Due to the methanol and chemical injection pressures required, Byers said this was the highest pressure application of the super duplex steel tubes, and flexible flying leads in the Gulf of Mexico to date.

Duco also designed the umbilical termination sled. High-pressure flexible risers were built by Wellstream to connect the umbilicals to Boxer. This was the highest-pressure rated flexible riser ever built to a 6-in. diameter. The flexible riser allowed the well to be tied into an existing conductor on the facility.

Gyrfalcon also made use of existing topsides equipment at Boxer and re-used the subsea infrastructure already installed at Boxer for a previous tieback, including an existing subsea control system, and process equipment. Both the control system and process equipment were reconfigured for Gyrfalcon production. The methanol and chemical injection equipment installed on Boxer for Gyrfalcon was designed and built by Petrex. This was the first 15,000-psi methanol injection system installed in the Gulf of Mexico.

15,000 psi tree

Initial offshore installation work began in February and March of 1999. The control system was installed, and facilities modifications on Boxer were undertaken. In May, the pipeline and umbilicals were laid, and the chemical injection system installed on Boxer. Byers said the focus was on getting the tree ready and pipeline in place so the rig contracted for the completion could be moved into place on time.

In reviewing the project, Byers said he learned a lot about the difference between what equipment is rated to do, and what it is actually capable of accomplishing. For example, he said that while subsea blowout preventers (BOP) may be rated to 15,000 psi, in most instances they are being used at 10,000 psi or less. When this equipment is used at 15,000 psi, it has a higher frequency of mechanical problems. He said a variety of other equipment used on this project had similar difficulties.

Still, some problems are to be expected when completing and testing a subsea well at a record high pressure for the Gulf of Mexico. The completion set a world record as the highest-pressure well to be frac-packed (fracturing and gravel packing) to date. Despite the significant challenges of the completion and the subsea hardware, Byers said the project would have stayed on schedule if it were not for rig BOP problems and unusually strong loop currents.

Project post mortem

While the Gyrfalcon project was a success in terms of the technology, Byers said in the future, he would like to see the tactics used on this well applied to a project with multiple wells and more reserves in place. Costs associated with completion and rig delays were detrimental to project economics. Much was learned in the process and the cost of a future project could be improved.

Specifically, Trevitt cites risk management as an area this project advanced for TOPS. With the experience gained on Gyrfalcon, TOPS developed some advanced software models the company can use for future projects. Such models give a turnkey company an advantage when bidding for work. The better the model, the more understanding the company has of what its costs will be.

As small independents move into deepwater, Trevitt said he thinks lump-sum turnkey projects will benefit. At the same time that the major producers appear to be focusing efforts on standardization, the independents can make money by keeping costs down.

To take the best advantage of this approach, Byers said contractors need to be willing to work more independently. One of the things that worked best on Gyrfalcon was the freedom vendors were given in solving problems. Trevitt said R&B would give him a list of requirements, the time frame, and the budget. This would be given to the vendors who would come back with the specifications, costs, and risks.

Then, the contractor could choose a level of acceptable risk based on experience. This is contrary to the way business is typically conducted, Trevitt said. Generally, the vendor is given the specifications and simply does what he is told. To achieve efficient project economics, he said this mindset would have to change. The contractor cannot afford to simply tell vendors what to do. Their chief function will be as a go between, managing the relationship and overseeing the process, rather than dictating the work of the vendor. "They have to manage the interfaces, rather than the details of the deal," Trevitt said.

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