March 2001 Vol. 222 No. 3  Offshore

Robert E. Snyder,  Editor

Future production: Saudi Arabia and deep water

The University of Houston’s Prof. Michael Economides, in his presentation to the January OMAE Houston Chapter meeting, posed the question, "Where will the next great round of petroleum production come from?" His answer was that there are really only two logical sources for the next, massive oil production – Saudi Arabia and similar producers, and the deep offshore, most prominently the Gulf of Mexico, but also including Brazil and West Africa.

In the first case, even with the best technology and management, petroleum recovery is bound to become gradually more difficult, and the activation index (which he described) will escalate. In deep offshore, he said, although the costs today are considerably higher, it is believed that intensive development of new technology and better technology deployment can reduce the index by 30 – 50% over the next five to seven years. Then the two will become competitive.

Thus, it is the battle between the two, Saudi Arabia and the deep offshore Gulf of Mexico (using the two areas here as symbols) that will shape petroleum production over the next two decades and beyond. The massive investment requirements, measured in the hundreds of billions of dollars in either case, are perhaps the single motivation for the recent consolidations among the biggest multinationals, Economides said.

The activation, or reactivation, index he described is the number of dollars required to deliver a stabilized production rate of one barrel per day. He said, further, that it is production, expressed in thousands or millions of barrels per day, and not low lifting costs, that attract investment dollars. In some petroleum-producing countries, although the reservoirs are prolific, local culture and deficient infrastructures keep costs high. In the U.S., the opposite prevails; even with costs cut to the bare bone, reservoir quality is an issue.

Action on Eastern Canada’s White Rose. Husky Oil Operations Ltd. (operator) and Petro-Canada filed a development application for the White Rose oil field with the Canada-Newfoundland Offshore Petroleum Board. Offshore Data Services reported in late January that the application’s five volumes include: Canada-Newfoundland Benefits Plan; Development Plan; Environmental Impact Statement; Socio-Economic Impact Statement; Preliminary Safety Plan and Concept Safety Analysis; plus a Development Action Summary. In the application, Husky proposed to develop the field with an FPSO system. Major components of the system are already on tender.

And Husky apparently is looking at the marketing of gas from offshore Newfoundland as well, assuming the FPSO system will primarily handle crude. The operator reportedly will conduct an extensive feasibility study into producing and transporting gas by pipeline to Newfoundland, then south to Nova Scotia. A consultant’s report to Husky has estimated pre-production costs at C$3.5 billion for a 1,400-km pipeline capable of handling 900 MMcfgd.

Husky notes that the National Energy Board estimates that Newfoundland’s offshore basins may hold more than 23 Tcf of reserves. As operator of White Rose, Husky has placed gas reserves for White Rose and South White Rose at 2.1 Tcf. The Jeanne d’Arc basin, which includes the White Rose fields, has 4.8 Tcf discovered gas.

But to make production economically feasible, the operator says 7 to 10 Tcf is needed, which requires more exploration. To that end, Husky is planning a 3-D seismic program this year. And any predictions of when gas production could start may also be based on a guarantee of C$3 to $4 per Mcf to proceed.

Big subsea project for Petrobrás. FMC Corp. announced in mid-January that Petrobrás has awarded it a $13-million order for the supply of 13 deepwater subsea systems for two offshore Brazil developments. The supplier, which has a "longstanding relation" with the operator, is expected to provide 13 subsea trees for Marlim and Marlim Sul fields, to be installed in 5,000 ft of water. Deliveries are to begin in September 2001 and continue through April 2002.

And a heavy delivery for Petrobrás. After its conversion from the DB-100 semisubmersible crane vessel at the Jurong Shipyard in Singapore, the 41,106-t Petrobrás 40 floating production unit was loaded onto Dockwise’s Mighty Servant 1 heavy lift vessel and transported to Rio de Janerio.

The hull of the P40 measures 124 m in length and 84 m in width. Stowed transversely on Mighty Servant’s deck, the total width, including flareboom, of the transport measured 181 m. Positioning off-center on the vessel’s deck resulted in an overhang on portside of 46 m, and on starboard 85 m, including the boom, see photo.

To load the P40, the vessel had to submerge to 25 m aft (12 m hull plus 13 m water above deck). After a 43-day voyage – with an average speed of 10 kt – from Singapore, the unit was safely discharged at Guanabara Bay in Rio, next to Santos Dumont airport on January 14. The transport was a new record for Dockwise.