Deepwater Development: What Past Performance Says About the Future Jarrett Dragani and Maxim Kotenev
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Forum Deepwater Development: What Past Performance Says About the Future Jarrett Dragani and Maxim Kotenev From its beginnings in 1897 to its of greater than 1500 m are dened recognized, but it is important to pinnacle as an industry whose sites as ultradeepwater. understand that only with extraordinary are visible from outer space, offshore However one denes deepwater amounts of effort, technical acumen, drilling has pioneered technologies, drilling, it is clear that, compared with risk, and, of course, money, was the given rise to the tallest structures conventional offshore drilling methods, industry able to progress in less than on Earth, transformed the seabed of it presents unique technical challenges 20 years from the rst deepwater US the Earth’s continental shelves into a related to greater water depths, higher Gulf of Mexico (GOM) discoveries manageable fossil-fuel resource, and pressures, manipulating the extra-long in the 1980s to total deepwater GOM provided work for millions of people. riser pipe connecting the wellhead to production surpassing shallow-water Despite innumerable obstacles, the rig (more than 1500 m in the case production by the end of the 1990s offshore drilling has successfully of the Deepwater Horizon ), extreme (Fig. 2). evolved and prospered over the last temperature gradients, and added Records continue to be set around century into its most challenging costs. Steve Terni, chairman of Exxon the world as the industry explores environment yet—deepwater and Neftegas, said in ExxonMobil’s The deeper prospects and dees what would ultradeepwater drilling. Lamp magazine, “Drilling 6 miles from seem to be the limits of technology and In an interview, Malcolm Webb, land beneath frigid waters and !oating economics. One of the planet’s deepest chief executive ofcer of Oil and Gas icepack is like threading the needle in hubs is currently Royal Dutch Shell’s UK, stated there is “no agreed industry the proverbial haystack, from way across Perdido platform in the GOM, !oating denition of what constitutes deep the farm, in a blizzard.” in 2438 m of water and built at a cost of water. When we started in the North USD 3 billion. The deepest operational Sea 30 to 40 years ago, depths of 100 Memorable Moments, platform is Petrobras’ Cascade eld to 700 ft would have been regarded as Record Wells !oating production, storage, and deep water; and, as our abilities and It is no coincidence that offshore crude of!oading facility in Walker Ridge technologies have moved forward, so oil production has become a major part Block 249 in 2600 m of water. the denition of what is deep has moved of the national energy supply in several The Kola Superdeep Borehole, with it. Depths west of Shetland in the UK major countries, notably the United with its pioneering technology in the vary from approximately 500 ft to 6,000 ft States. The offshore industry extends recovery of rock cores, was the deepest plus.” As a matter of convenience, further back in history than many and longest borehole in the world for however, deepwater drilling depths are people realize (Fig. 1). There are, nearly 20 years. But, in May 2008, a new sometimes dened as being greater of course, many more advancements record for borehole length was set by than around 400 m, while water depths in offshore development that can be Transocean’s extended-reach-drilling well, BD-04A, drilled for Maersk Oil in the Al Shaheen oil eld in Qatar. It was drilled in only 36 days to 12 289 m with Jarrett Dragani earned a BS degree in mechanical a record horizontal reach of 10 902 m. In engineering with a specialization in energy and the terms of depth below surface, however, environment from the University of Calgary. He currently the Kola Superdeep Borehole still retains works for Cenovus Energy as a mechanical engineer the world record. supporting design and construction of the Christina Lake Oil More recent successes include those Sands Expansion and has 3 years’ upstream experience of the Sakhalin-1 consortium, operated working across various sectors of the industry in western by Exxon Neftegas. The Odoptu OP-11 Canada. He is a member of the SPE Calgary Section board reached a measured depth of 12 345 m The Way Ahead as well as an editor for SPE’s . and a horizontal displacement of 8 The first oil discovery in deep water transpires at Shallow water operations were the norm Shell Oil Company’s Cognac field, GOM. As with until 1996, when Royal Dutch Shell installed the development of technologies that could adapt ‘Bullwinkle,’ the world’s tallest structure at 1,736 ft from land to sea drilling, Cognac adapts fixed high, standing in 1,350 ft of GOM water. Also in 1996, One of the oldest subsea wells, the Bibi Eibat platform technology from shallow water, which Shell launched ‘Troll,’ in Vats, Norway. ‘Troll’ is not well, comes on stream in Azerbaijan. The well proves economically impractical for moving much as tall, at 1,500 ft high, nor as deep, standing in is located on an artificial island in a shallow farther from the coast, to one that can contend 1,000 ft of water. However, ‘Troll’ is one of the two portion of the Caspian Sea. with deepwater drilling. uman-made objects visible from the moon with the unaided eye, the other being the Great Wall of China. 1897 1947 1982 1923 1975 1996 1961−1982: The first offshore drillship is the CUSS 1 developed for the Mohole project to drill into the Earth’s crust. In 1982, Unocal Corporation drills the first horizontal well in the North Sea. Kerr-McGee Oil Industries (now Anadarko Petroleum), as operator for partners Phillips Petroleum (ConocoPhillips) and Stanolind Oil & Gas (BP) completes its historic Ship Shoal Block 32 well, Gulf of Mexico (GOM), in October 1947, months before Superior Oil drills a discovery from its earlier-constructed Vermilion platform farther offshore. This makes Kerr-McGee’s well the first oil discovery drilled out of sight of land. Its barge and platform combination is a major breakthrough in drilling-unit design for offshore use. This event marks the beginning of the modern offshore industry as it is known today. Summerland, California, oil workers notice greater oil yield closer to sea. H.L. Williams comes up with the idea of building a wharf and erecting the drilling rig on it. His first offshore well extends about 300 ft (90 m) into the ocean and, as expected, is a good producer. Before long, entrepreneurs build several more wharfs. The longest stretches over 1,200 ft (nearly 400 m) into the Pacific. Fig. 1— Memorable moments in offshore oil and gas history. 11 475 m and was completed in only to absolute certainty. Therefore, the next 40 years. This means there 60 days. The Chayvo Z-44 reached companies inherently acquire risk will be great opportunities for a long a measured depth of 12 376 m, the every time they decide to explore time ahead.” equivalent of 23 Ostankino Towers (the and produce oil and gas. Working A second answer to the question tallest freestanding structure in Moscow). under adverse weather conditions concerns economics—or rather, history and in remote areas of the world, with and economics. In the offshore industry, Economics expensive equipment and limited just as in any other, there are many The technological achievements of the knowledge of what lies beneath assumptions and various factors that deepwater industry are impressive, to the Earth’s surface, it would seem feed into the economic assessment. say the least. But, are they !nancially that, in the world of deep water, risk Major factors include !eld size, reservoir successful? After all, economic supersedes reward. quality and "uid quality, water depth viability is the cornerstone of every So why, then, do companies continue and oceanic environment, selection major project. The combination of to pursue deepwater projects all around of drilling and production platform, pro!table economics and solid project the globe? drilling schedule, production schedule, execution generally leads to overall One answer to this question is that production processing, and storage project success. The word “generally” lower-risk conventional oil basins are and handling requirements. Which has been selected with care, lest maturing, and new discoveries in these combination of the aforementioned we forget there is always risk and areas are few and far between. So, parameters will result in economic uncertainty to take into consideration. the industry must turn elsewhere to feasibility is truly unknown because it is In oil and gas, there is uncertainty in !nd new production prospects. John- so particular to each project. However, the exploration process—in trying Morten Godhavn, adjunct professor what can be said is that there are many to categorize the size and scale of at Norwegian University of Science different permutations that do lead to the resource at hand. Geophysicists, and Technology, said in an interview, economic success, and this has been geologists, petrophysicists, and “Big reserves have been found in well illustrated over the years. reservoir engineers operate from a deep waters, in particular in the Gulf In 1987, M.G. Grecco of Unocal limited data set; and, despite having of Mexico, west Africa, east Africa, Corporation wrote a paper for the some of the best technology available and Brazil, but also in the Arctic. Some Offshore Technology Conference titled and unprecedented technical acumen, of the deepwater wells in the Gulf of “Deepwater Development Economics.” they cannot provide anything close Mexico are planned to produce for Grecco’s assessment compared a Vol. 9 // No. 1 // 2013 9 Forum for servicing. Webb noted that much of the innovation in the production sector is aimed at overcoming challenges specic to deepwater environments— the combination of low temperatures, high seabed pressures, and gas and water that cause gas hydrates to form.