October 1998 Vol. 219 No. 10  Offshore

Robert E. Snyder,  Editor

Offshore Northern Seas; Gulf of Mexico records

The Offshore Northern Seas (ONS) biennial conference and exhibition held in Stavanger, Norway, was a resounding success, even with the worldwide oil / gas industry "going through a rough period," as Conference officials put it. This year's show featured 1,200 exhibitors, up about 16% from 1996. There were 677 non-Norwegian stands, up 12% from 1996. Total attendance was in the 30,000 range, also up slightly from 1996.

The ONS exhibition differs from Aberdeen's Offshore Northern Seas and Houston's Offshore Technology Conference in that major oil companies operating in Norway are "obligated" to have a presence with a stand.

Unfortunately, this year, most of the oil company stands were impressive only because of their size, typically comprising a big wall of essentially nothing but environmental posters, and manned by attendants ushering people through a canned movie showing how dinosaurs and plant bits became oil buried 10,000 ft below the seabed. If you wanted to find out what new technologies were being used to get that oil out, it wasn't always that easy to find an engineer who knew what was going on.

This "environmental" theme pervaded more than one-third of the Conference sessions, as our industry executives and various energy ministers, etc., told the world how we are going overboard to ensure that environmental concerns are key to all of our operations.

A group called Nature and Youth protested outside the Conference hall, then was dragged off by the police in a staged scenario well documented by TV coverage. And Greenpeace held a press conference, in which it declared that the world has reached its budgeted CO₂ emissions level, as decreed by the Kyoto Conference. We thus cannot burn any higher levels of fossil fuels and, consequently, all oil / gas exploration must stop. The oil companies must, instead, turn to development of renewable energy.

Greenpeace made a comment in the press conference about the U.S. oil companies being "heavily subsidized." In response to my question about this, as I was curious to know where this comment came from, we were referred to the report The oil industry and climate change, a 68-page briefing report prepared by Greenpeace. E-mail the author, Kirsty Hamilton, at: khamilton@ams.greenpeace.org, if you are interested.

Quoting from this report, "In 1995, the U.S. government paid out between $5.2 billion and $35.2 billion in subsidies to the oil sector. The upper end of this range ($15.5 to $35.2 billion) includes the defense of oil supplies in the Persian Gulf. The lower end includes: tax breaks for oil exploration and production (one-third of the subsidies); the oil stockpile in the Strategic Petroleum Reserve...; and supports for oil-related exports and foreign production, and protection of coastal shipping routes." Bet you never thought of our peace-keeping efforts in quite that way before.

I guess what really bothered me about this "greening" of what has been a sound technical forum is that nobody over there particularly cared. A typical response was, "It's a good thing they are bringing all of this up so that the oil companies will be aware of the problem." I will admit that some oil companies have needed a little prodding to clean up their acts. As to stopping all exploration, that's the beginning of the end of our business as we know it, and I don't think we're quite ready for that.

Chevron drills in record water depth. Operator Chevron U.S.A. Production Co., and JV partners Shell, EEX and Enterprise Oil Gulf of Mexico, claim a new water-depth record of 7,718 ft in spudding an exploratory test well in the Gulf of Mexico's Atwater Valley Block 118, about 175 mi SE of New Orleans. The Atwater Valley 118-1 should reach a 15,470-ft sub-seabed TD in the 4th quarter.

Global Marine's converted ex-spyship Glomar Explorer is doing the drilling, which began August 9. Chevron says it and Texaco, over the next five years, will "alternate into the operator position" to drill a planned 20 deepwater GOM wells. The company says, "The Explorer and Chevron's second drillship, Transocean Deep Seas (100% Chevron-owned, to be delivered in 2000), will enable Chevron to evaluate its 80 ultra-deepwater prospects."

Jackup market takes a hit. Offshore Data Services' Offshore International Newsletter reports a continued slide in both cantilever and slot jackup utilization for rigs for 250 ft and over, as low oil prices cut 1998 spending. Most of the decline has occurred in the Gulf of Mexico, where 17 units were stacked in August.

Worldwide, 300-ft cantilever and slot rigs were at 89% and 83% utilization, respectively, from previous 95% and 92% levels. As some consolation, a few operators said they would take advantage of falling dayrates to put a few rigs to work yet this year. Outside the U.S., utilization / dayrates for cantilevers have held "relatively firm."

ODS has also noted that floating platform installations are "leveling off for 1998, compared to last year's pace." In 1997, a total of 29 units, including floating production and floating storage, were installed worldwide. So far this year, 10 floating platforms have been installed worldwide and 21 are planned for installation and hook-up, which is unlikely, ODS says. If completed, the 31 units would only be two more than in 1997.

Anadarko taps the Tanzanite sub-salt. Anadarko Petroleum announced a record-setting flowrate from its recent sub-salt discovery in the Gulf of Mexico, 75 mi offshore in 314-ft water. Tanzanite 1 tested 21,917 bopd and 29.7 MMcfd solution gas from a perforated 50-ft interval of a 450-ft continuous hydrocarbon column.

Using a second jackup with "extensive" test equipment, flow was through a 1.25-in. choke, with 2,679-psi flowing tubing pressure; the oil was 21.9°API. Design of a platform is underway, for possible first production in 3rd quarter 2000. A seafloor drilling template will be set and Rowan has been contracted to drill the first field development well early this fall. Anadarko, the 100% interest owner, estimates at least 140 MM bo equivalent reserves in Tanzanite field.

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