Offshore update

May 2002 Vol. 223 No. 5  Offshore Update

Robert E. Snyder,  Contributing Engineering Editor

Central Gulf of Mexico Lease Sale 182. The March 15 Gulf of Mexico Newsletter had a good wrapup of this recent sale, along with a complete review of companies winning blocks. The report notes that operator interest in the sale, held March 20 in New Orleans, was down substantially from the previous Central Gulf Lease Sale 178, Part 1. The government received 697 bids on 506 blocks, down 83 bids from the last sale, which logged 780 bids on 547 blocks. The total of high bids is also off significantly. The decline in bidding appears to be due to depressed oil/gas prices.

The highest offer in March’s sale was a $17.5-million bid from Phillips for Green Canyon Block 199, which is ringed in the south by several BP-owned leases. As in previous sales, shallow water garnered the most bids of any water-depth category, with the issuing of 288 bids on leases lying in water depths less than 653 ft. Intermediate water depths, ranging from 656 ft to 2,621 ft, captured 61 bids, the weakest showing of any water-depth class. For deep- and ultra-deepwater categories, operators bid on 81 bocks located in deep water, and 76 in ultra-deepwater.

The Newsletter says several companies took the tack of expanding their holdings adjacent to installed infrastructure and producing properties. Notable operators doing this included Dominion E&P, BHP and Energy Partners. MMS’s Five-year Plan ends with this sale, and it is gearing up to institute the new five-year plan, which, pending Congressional approval, will take effect July 1. Under the new plan, operators will have 20 new lease sales in the GOM and offshore Alaska to consider.

Offshore rigs: Still waiting. The Offshore International Newsletter of March 4, in a report on the international rig market, says, "Worldwide offshore rig demand is at its lowest level in four months, having been dragged down by continued softness in Gulf of Mexico rig demand and a slight downturn in demand in other major rig markets." Dayrates in many markets are under downward pressure, and a turnaround is not likely until late in the second half, if then, the report says. Only 485 of the world’s 601 jackups, semis and drillships were under contract in March, down from 492 in February. "Worldwide rig demand has been in decline since the contracted rig count hit 546 in June 2001. Over the near term, an additional decline seems likely."

Gulf of Mexico utilization was 60%, representing 120 rigs under contract out of 200. The drop was led by the jackup market; but the semi market slipped as well, with demand falling from 32 units in January to 23 in March. Latin America appears to be the "unlikely" bright spot, with 63 of 66 rigs under contract – the highest level since January 2001.

In the North Sea, 70 of the 82 mobile rigs were under contract, a 10-rig decline over 90 days. Seasonal factors were to blame, in part – but not entirely, the Newsletter notes. West Africa rig fleet utilization remained above 90%, although it declined slightly since early January. In March, 42 of the 45 rigs in the area were under contract, and fleet utilization was 93.3%. And in the Asia / Australia area, the supply of about 68 rigs was 80% utilized, a trend that is expected to continue for several months.

Development news. The first line of the record-breaking gas pipeline Blue Stream has been completed. The Saipem 7000 semisubmersible vessel carried out the laying of the first of the two lines that will bring, at full capacity, 16 Bcm (565 Bcf) of gas per year from Russia to Turkey. The 380-km (612-mi)-long subsea line was laid at a record water depth of 2,150 m (7,052 ft). The project is one of the most significant results of the strategic alliance between Eni and Gazprom. The offshore work began at the end of June 2001. Saipem 7000 crossed the Bosphorus Strait on August 6 and began the deepwater laying work in October. The project involves a $2.3 billion investment.

The 24-in. pipe was connected to the already existing section laid offshore Turkey by Castoro 8, another Saipem fleet vessel. Blue Stream will be the main source of gas supply to Turkey. An overland section in Russia, about 370-km (596-mi) long, will be built and operated by Gazprom. The offshore stretch, comprising two subsea gas lines will utilize a compressor station at Beregovaya in Russia. An overland section in Turkey will be built and operated by the Turkish State company Botas.

In the North Sea, Aker Kværner, the merger of two well-known companies, has been charged with devising the best method of exploiting five new oil/gas reservoirs near the Britannia field, one of the largest gas fields in the North Sea. The fields, known collectively as the Britannia Satellites (BritSats), are estimated to contain several hundred million barrels of oil and several billion cubic feet of gas. On behalf of the fields’ operators, Britannia Operators Ltd. (BOL), Aker Kværner will design subsea tie-ins from the new reservoirs, bringing oil and gas back to the existing Britannia platform for processing. Initial planning is to last five months, and be followed by detailed design / installation of upgrades to the existing platform. Production is expected to begin at the end of 2004.

And in the Gulf of Mexico, Delmar Systems and Shell E&P established a world-record depth for moored vessels using the latest in mooring technology. The Transocean Sedco Forex, 5th generation semi Deepwater Nautilus was moored in 8,009 ft of water with the deepest anchor at 9,110 ft. This ultra-deepwater mooring project was accomplished using high-strength synthetic mooring rope connected to suction anchors.

The current mooring system comprises eight, 9 ft, 5 in.-dia. by 70-ft long suction anchors embedded in the seafloor and attached to 9,000 ft of 6-1/4-in. polyester mooring rope and 3,500 ft of 3-3/4-in. steel wire rope. The polyester and steel rope is connected to the anchor via patented Delmar Subsea Connectors. The lighter-weight mooring rope is an alternative to traditional steel wire rope. The trade-off in reduced weight increases the rig’s variable deck load, permitting the rig to anchor in deeper waters.

The world-record installation was accomplished in a two-step process, whereby the suction anchors were pre-installed using only one anchor-handling vessel, the Gary Chouest, owned by Edison Chouest Offshore. The eight mooring legs were then pre-installed at a later date, allowing for quick connection once the rig arrived on location.