Offshore update

June 2002 Vol. 223 No. 6  Offshore Update

Robert E. Snyder,  Executive Engineering Editor

OTC 2002. The Offshore Technology Conference returned to Houston May 6 – 9, with an attendance of 49,620 people – the largest number since 1985, but short of the record 108,000 of 1982. The exhibit featured more than 2,000 companies and occupied the 706,000-sq ft floor of the new Reliant Hall exhibition center. Traversing this complex, a single building, 590 ft by 1,532 ft in size with 72 meeting rooms, can be work. But the organizing committee did a great job in pulling it off. The Conference delivered 49 technical sessions that included 285 technical papers, plus eight topical lunches, two general sessions, and more.

FPSOs in the U.S. Gulf. This is a major topic of discussion. The Minerals Management Service has approved use of FPSOs in the Gulf, and it and the industry are waiting for a company to make the decision to use such a facility for deepwater development. Remaining issues, as enumerated by Bluewater, are: deepwater economics; availability of Jones Act-compliant shuttle tankers; and gas handling.

Shuttling is being addressed by industry. Seahorse Shuttling and Technology, a Conoco-owned entity, has designed a new shuttle tanker called GoMAX 550, a 40-ft-draft vessel that can enter most U.S. ports carrying 550,000 bbl of crude. The vessel, designed by Samsung, would be built at Alabama Shipyard, to meet Jones Act requirements that vessels operating totally in U.S. waters must be constructed in the U.S.

Gas handling is a major concern involving: pipeline infrastructure, gas to liquid conversion and gas re-injection issues. Bluewater discussed the transferring of LNG from possible offshore floating LNG plants, and the new technology of transporting compressed natural gas as an alternative to gas pipelines – the EnerSea Transport vessel design Votrans 1 was shown as an example possibility.

Stranded gas. This issue, particularly relative to deepwater developments, was the subject of an interesting OTC panel discussion. Increased need for LNG movement to major consumers, including the U.S. was a key topic.

El Paso Global LNG described major plans for its proposed El Paso Energy Bridge system involving LNG transport and delivery vessels. The concept would involve a vessel and buoy system that delivers LNG directly to an offshore subsea pipeline terminal in water depths to 35 m (115 ft). The company has committed to three LNG vessels compatible with either the "Bridge" concept or conventional terminals. Partners include Daewoo, Exmar and Statoil.

Another offshore system for handling, treating, storing and offloading oil and natural gas products is Shell’s Floating Oil and Natural Gas (FONG) production vessel system. FONG takes well production, separates light fractions from the oil stream, processes the gas into LPG and/or LNG, and returns condensate to the oil stream. The vessel features a new LNG offloading system that can safely transfer LNG into standard carriers via side-by-side configurations. FONG "eliminates need for either pipelines or re-injection, opening the way to produce marginal fields in remote waters."

Petrobras presence. The Brazilian operating company was active at OTC, with its new President Francisco Gros overviewing the company’s progress and goals. With reserves approaching 10 Bbbl oil, the company is aiming for an increase to 1.9 MMbopd production by 2005, despite its change, in 1998, from an oil monopoly. Of 55 exploratory concessions in Petrobras’ portfolio, 29 are partnerships, with 18 operated by the partners. The company drilled 36 wells in waters deeper than 1,000 m last year. This year, another 30 will be drilled in waters deeper than 1,000 m, 18 deeper than 2,000 m. Its Marlim Sul 42-H in 4,000-ft water is producing 37,000 bopd from a horizontal extension.

In the OTC’s Offshore Safety & Security Session, Carlos Tadeu de Costa Fraga, Executive Manager of Petrobras E&P S-SE, described results of the investigations into the P-36 explosion and sinking of March 15 – 20, 2001. The 84,000-bpd converted Spirit of Columbus semisubmersible listed, then sank in 4,500-ft water.

The ensuing investigation has been a massive four-stage operation, involving: 1) more than 2,000 employees in debates, interviews and presentations; 2) more than 200 specialists in peer-review meetings to set up the Program for Excellence (PEO) in the operations of offshore units; 3) implementation of the PEO and establishing a new set of measures; and 4) program evaluation. The exact cause of the problem has not been pinpointed, but the process has focused so intently on offshore equipment design and operation that existence of any potential problems is nearly inconceivable.

Valuable MMS deepwater report. The Minerals Management Service announced availability of the publication Deepwater Gulf of Mexico 2002: America’s Expanding Frontier. This publication is the third that MMS has released describing the astonishing levels of deepwater (>1,000-ft) oil and gas activity in the GOM. Earlier versions in 1998 and 2000 chronicled the emergence of massive exploration / development. A certain level of maturity has now been reached.

Within this 133-page report, the introductory section highlights current deepwater activity. The leasing section discusses: bidding trends; holdings of major companies compared to non-majors; the impact of company mergers on exploration; and future deepwater leasing. The drilling / development section covers: rig activity; drilling statistics; transition to deeper wells and deeper water; and progress of deepwater infrastructure development.

The reserves / production section analyzes: historical and large future reserve additions; discoveries in lightly tested plays with large potential; potential for large future discoveries; historical trends; deepwater production from various companies; and high deepwater production rates. And the summary and conclusions discuss: increasing oil/gas production and anticipated new fields; increases in discoveries based on the large lease inventory; lags between leasing, drilling and initial production; evaluating deepwater leases before expiration; and significant changes since the 2000 report.

Copies of the report can be obtained from MMS, Gulf of Mexico OCS Region, free of charge by referencing OCS Report MMS 2002-021. Telephone requests may be placed at 504-736-2519 or 1-800-200 GULF, or fax: 504-736-2620. The report is also on the MMS web: 6ww.gomr.mms.gov/homepg/whatsnew/techann/2002-021.pdf.