June 1999 Vol. 220 No. 6  Offshore

Robert E. Snyder,  Editor

OTC ’99, Gulf of Mexico action

The 31st annual Offshore Technology Conference was held in Houston, May 3–6. The show was probably more exciting than expected, considering the industry’s economic condition. But that is because the world’s several deepwater developments are proceeding, hoping for higher oil prices when these big new fields come on. Overall attendance was 44,700, down 10% from last year’s 49,600.

The 47 technical sessions presented some 300 papers covering the range of offshore operations from exploration through production. These sessions included nine multipaper reviews of field developments in the Gulf of Mexico, the Bay of Campeche, the North Sea and Brazil. These reviews are good. However, for my part, I — and many development engineers, I’m sure — would appreciate more technical transfer on these milestone projects while they are being designed and installed, as opposed to post-mortem reports. That’s not going to happen, of course, but it would be a real big service to the industry if it did.

About the exhibition — again it’s an opinion — but it was fairly obvious that the glamorous new concepts for offshore platforms, floating production systems and vessels that we typically see at OTC are somewhere on someone’s drawing board and not "on the market" yet. Looks like all but the most necessary R&D has been tabled for the past few months. It could have been worse, at least it’s a good venue for meeting old friends — some still getting a paycheck — and meeting new ones.

U.S. Gulf of Mexico projects. The recent weeks have seen several deepwater plays hit the press with positive developments. Shell Deepwater Production Inc. (operator) and partners BP Amoco, Conoco and Exxon, announced the start of oil / gas production in March from their Ursa TLP in 4,000-ft water, 130 mi SE of New Orleans on Mississippi Canyon 809. Initial production was 13,000 bopd and 20 MMcfd gas from the first well. Ultimate recovery is estimated at 400 MMboe.

An additional two delineation wells and two sidetracks have been drilled; up to 14 producers are planned — 12 of these were batch set, and will be drilled with a contract platform rig. The TLP has 24 total well slots. An 18-in. oil pipeline and a 20-in. gas pipeline will transport production to West Delta 143 platform.

Shell also announced plans to proceed with development of its 100%-owned Brutus oil / gas discovery, using a TLP in 2,985-ft water, with installation set for 2001. The 8-slot TLP, located on Green Canyon 158, some 165 mi SW of New Orleans, is designed to serve as a hub for future subsea projects in the area. Production, to begin by late 2001, is expected to ultimately reach 100,000 bopd and 150 MMcfd gas. Brutus is Shell’s 5th TLP in the Gulf. And it’s the 17th GOM deepwater project in which Shell is involved.

Eight wells will be batch set with a semi rig, beginning this year, and at least one of the development wells will be predrilled. A 26-mi, 18-in. oil pipeline to South Timbalier 301 B platform and a 24-mi, 18-in. gas pipeline connecting to the Manta Ray Offshore Gathering System will transport production. Over-design of the TLP’s facilities will allow it to serve as a hub for surrounding developments.

Shell has further announced another discovery, called Oregano, in 3,393 ft of water in Garden Banks 559. The discovery, for which size and potential development options have not been completely described, will require an appraisal well before the operator commits to development. The site is some 8 mi south of the Auger TLP and 4 mi from Shell’s Macaroni subsea development. The Noble Paul Ramano semi drilled the discovery. As noted by the Gulf of Mexico Newsletter, Shell has at least three other discoveries in the Auger basin, including Cardamom, Serrano and Habanero.

BP Amoco has reportedly discovered significant oil / gas reserves on its Mad Dog prospect in Green Canyon 826, in 6,700-ft water. Spirit Energy is a partner in the project. The well was drilled by Transocean’s Discoverer 534 drillship; an appraisal is expected later this year.

And in shallower water, Chieftain International has brought on its South Marsh Island 39 field, located 130 mi SW of New Orleans in 100-ft water. The operator is Equitable Production Co., with 50%. Chieftain says its initial production share should average 2,000 bopd and 3.2 MMcfd gas from two wells, implying that the total initial production is probably twice that amount. Two additional wells will be connected this year, and a 5th well has been drilled.

FPSOs for the U.S. Gulf? Industry is waiting on final approval from the U.S. Minerals Management Service (MMS) before seriously planning use of FPSOs in deepwater developments. Presently, there are none in deep or shallow GOM waters, except for the single FSO operating in Pemex’s Cantarell field in the Bay of Campeche.

MMS requires a comprehensive Environmental Impact Statement (EIS) on possible use of FPSOs in the Gulf. Positive movement in that direction has been made with the awarding by MMS of a $997,060 contract to Ecology and Environment, Inc., and subcontractors, to complete the EIS in 18 months. The industry group DeepStar has funded this project, with 14 members providing the money.

MMS will manage the contract and retain overall responsibility for compliance with the National Environmental Policy Act. Det Norske Veritas (DNV) will be the primary subcontractor and will conduct the risk analysis portion of the study. The contract calls for a draft EIS by March / April 2000, followed by public hearings in April / May. The final EIS may be released in September / October 2000.

Two other news items were covered by MMS at OTC ’99. The agency is in the 3-year planning stage for Eastern Gulf Lease Sale 181, tentatively set for December 2001. This sale is a key step in opening this vast area now put off limits by President Clinton’s Eastern Gulf Moritorium until 2012. Sale 181 will target a specific site with 1,033 blocks, 15 mi off Alabama and 100 mi off Florida.

And MMS has a new Director, Walt Rosenbusch, effective May 17. He succeeds Cynthia Quarterman, who resigned in February. A Texan, Rosenbusch has been involved with several Texas and U.S. energy agencies, He was appointed by Secretary of the Interior Bruce Babbitt.

Copyright © 1999 World Oil
Copyright © 1999 Gulf Publishing Company