Dec. 2000 Vol. 221 No. 12  Offshore

Robert E. Snyder,  Editor

UK licensing round; intelligent wells; FPSO study

The UK government will offer licenses for companies to search for oil / gas in the area between the Shetland and Faeroe Islands north of Scotland known as the white zone. Energy Minister Helen Liddell said a formal invitation will be made "shortly" to oil companies to bid for the licenses, to be contained in the 19th Oil and Gas Licensing Round. Applications will close early in 2001.

The white zone represents a further widening of the oil / gas reserve search on the UKCS. This area of the NE Atlantic is expected to attract much interest from the oil industry because several prospects have already been identified there.

The 19th Round will be subject to fresh regulations aimed at protecting the habitats of wildlife and marine species in the area. And the government has initiated a three-month public consultation period that will look at the potential environmental impact of activity. Mrs. Liddell said 19th Round applications will be the first to be considered under this new approach.

The Minister’s statement regarding the consultation period, together with announcement of the round opening, has been warmly welcomed by the UK Offshore Operators Association (UKOOA). James May, the group’s Director General, said, "These announcements will help remove uncertainty surrounding development of the NE Atlantic as a potential future source of oil / gas to maintain this country’s energy supply and protect the 270,000 people employed by the industry."

Despite the area’s complex geology and its challenging water depths and weather, there is considerable interest from offshore operators, particularly as the North Sea enters maturity. "The UK offshore industry takes seriously its responsibility to protect the marine environment. Through the Atlantic Frontier Environmental Network (AFEN), the sector has invested more than £5 million in research. This has significantly improved scientific knowledge of the Atlantic to the NW of Scotland and enhanced industry environmental practice," May added.

New intelligent well installations. Norwegian operator Norsk Hydro has commended Baker Oil Tools for the recent installation of its hydraulically operated InForce Intelligent Well System in a dual-zone completion in the North Sea’s Snorre field. This installation, which allows each zone of the well to be remotely accessed or closed in less than 5 min., expands the successful record established by previous installations of Baker’s hydraulic intelligent well systems in the Middle and Far East.

Hydro says the installation will reduce rig cost while putting the P-30 well on production faster. Individual zones can now be opened and closed remotely rather than requiring use of the rig. The completion system controls fluid flow from two separate zones at a measured depth of 15,600 ft to 17,056 ft, and allows each zone to be accessed or closed remotely without costly coiled tubing intervention required in conventional completions. The project represents the first installation of the InForce System in the North Sea. These systems were successfully installed in the Middle and Far East in 1999.

Baker has also been awarded Petrobras’ first-ever intelligent completion system contract. Ultimately intended for the operator’s ultra-deepwater Roncador field, the developer’s InCharge Intelligent Well System was selected over other offerings due to its simplicity and all-electronic design, incorporating a "one-penetration" approach and a "power-on-communications" architecture that will require little to no retrofit of existing subsea trees.

One aspect of the system that is particularly valuable to subsea operators is the single control line that penetrates packers and wellhead. Combining power transmission, command / control and data transmission on a single, 1/4-in. penetration delivers simplicity without sacrificing functionality. And the deployment will employ the world’s first downhole electrical disconnect / reconnect system.

FPSO optimization JIP. Noble Denton Europe Ltd. (NDE) is launching a new joint industry project that aims to improve FPSO design to optimize system safety / reliability which will, in turn, lower operating costs and capital requirements. The study will focus on reliability analysis and system modeling of critical limit states and follows a preliminary study, previously performed by NDE for the UK Health and Safety Executive (HSE). It acts as a catalyst to draw together current FPSO experience and will enable further development of the design process through enhancing current understanding of the operational system behavior.

It will address shortcomings within the current design process and issues that have not yet been studied in detail. The outcome is expected to identify cost-effective design improvements, based on risk reduction benefits and life-of-field reliability. NDE says there is definite potential for producing optimized FPSO design guidelines and achieving a reduction in unnecessary construction / operation costs. The project will commence in January 2001 and is scheduled for completion within 18 months. There have been two launch meetings, one in London in October, the other in Houston in November.

A wide range of companies have expressed a strong interest in the project besides HSE. Such organizations include BP, Shell, ExxonMobil, TotalFinaElf, Statoil, MMS, ABB, Maersk, DNV, Lloyd’s Register, Bouyges Offshore, Bluewater, Bureau Veritas, Norsk Hydro, Fred Olsen Energy and the U.S. Coastguard.

Merger would make another deepwater leader. As analyzed by the Gulf of Mexico Newsletter, the pending merger of Chevron Corp. and Texaco Inc. would make the new company the number two deepwater operator in the Gulf of Mexico, holding stakes in 754 GOM leases located in 1,500 ft of water or deeper. BP presently holds 773 leases in these water depths. The combined company would have four drilling rigs under contract rated to drill in greater than 5,000 ft of water – two of which are still under construction for delivery yet this year. The Newsletter says "Chevron Texaco" expects to save $1.2 billion within six to nine months of the merger, with over half of this coming from more-efficient exploration and production.