What's new in production

Oct. 2002 Vol. 223 No. 10  What's New in Production

Robert E. Snyder,  Executive Engineering Editor

Offshore prospects look good. Energy analysts Douglas-Westwood and data specialists Infield Systems of the UK say the offshore industry should enjoy steady growth over the next five years, and the longer-term prospects are looking even better as the potential for higher oil prices grows. However, the growth is mainly seen to be outside the North Sea, where reserve sizes of new field developments are now "very small." Considering global offshore prospects, Infield notes that there were "a total 2,384 fields under consideration for future development worldwide, which could involve 1,587 fixed platforms, 232 floating production systems, 138,000 km of pipelines and 30,000 km of umbilical cables."

The question is, how many of these prospects will be converted into actual development projects and over what timescale. For the next five years, continued growth in capital expenditure is expected in four key sectors: 1) Offshore pipelines – some 45,000 km are forecast to be laid at a total capital cost of $54 billion, a growth of 44% over the previous 5-yr period; 2) Subsea production – 1,620 subsea wells are forecast to come onstream, including associated flowlines, templates / manifolds, control systems and umbilicals; expenditure is likely to total almost $48 billion, a growth of 50%; 3) Floating production – 134 floaters are likely to be installed (including newbuilds, conversions and upgrades, at a capital cost of $32 billion, a growth of more than 50%; and 4) Deepwater – preliminary indications are that global deepwater activity could double over the next five years.

The analysts say more and more oil must come from deep water. The world is drawing down its oil reserves at an unprecedented rate and, even assuming no growth in demand, it is likely that by 2010, oil supply will be constrained by global production capacity and oil will permanently cease to be abundant. The next major drive will be to fully utilize gas reserves, much of which are currently "stranded" in offshore locations devoid of pipeline infrastructure and/or viable regional markets. Overall, the long-term prospects for the offshore are good.

The real long-term play is offshore renewable energy, which is in its very early stages of development, said Douglas-Westwood. Research currently underway in this firm indicates that in excess of $4.3 billion will be spent on offshore renewable energy installations this decade; but it could be considerably greater if more of the large numbers of proposals reach realization. For further details, check the Web at: www.dw-1.com.

New gel plugs water entry. A water-based hydrogel, developed by Drs. Donald Eagland and Nicholas Crowther, at Bradford University’s Department of Pharmacy, northern England, has successfully solved, in early field tests, a problem for the industry – how to treat oil wells to reduce the presence of water. The scientists discovered the unique hydrogel in 1997, while carrying out research. They now head the university’s spin-off company, Advanced Gel Technology Ltd. (AGT), which officially opened its new site in March. The firm has been awarded a contract with Canadian water-blocking firm Aqueolic to use the gel on five sites, after which it may be extended to other sites.

The Aqueolic / AGT partnership has resulted in a treatment called HYDRAGELseries PT, known as Bloxit. The technology is based on a reaction between two copolymers to produce a unique hydrogel with a wide range of novel properties. It comprises 97.5% water and can thicken to produce a substance that is many times stronger than other gels. The new compound is formed from two long elastic molecule (polymers) which form strong bonds to produce a 3-D network. Its consistency can be tailored to produce different properties of strength and consistency, whether thick, thin or sticky. The gel’s setting time can be controlled through formulation. Pressure does not shorten the time to gel; and performance is unaffected by temperatures up to 160°C and pressures to 5,000 psi

Types of problems investigated cover: water coning, high-permeability layers, fractures, poor primary cement, worm holes, etc. In particular, AGT has focused on resolving the problems of water coning in oil and gas wells, and this application is now ready for the market. In another potential application, in response to an inquiry from Latin America, AGT has developed a solution to transporting heavy crude oil by pipeline. This involves reducing the viscosity using a hydrogel formulation. Preliminary results show the new gel offers improved performance, measured against the surfactant technology currently in use. AGT’s contact information is: info@advancedgel.com; or www.bradford.ac.uk.

Offshore Lease Sale 184. The Gulf of Mexico newsletter says Sale 184 for the Western Gulf of Mexico, held August 21, was out of line with recent GOM sale trends. This year saw a slight increase in bidding, with 391 bids on 323 blocks, compared to last year’s Sale 180, which garnered 386 bids on 320 blocks. Yet, the sum of all bids this year was $181.5 million, and the sum of high bids was $151.2 million, compared to total money exposed last year of $189.9 million and high bids totaling $165.6 million.

Forty-four companies participated in this year’s sale, which offered 4,102 tracts comprising 22.3 million acres offshore Texas and Louisiana. The average of high bids in this year’s sale was $468,313. Last year’s sale brought in high bids averaging $517,412, from 41 companies. The highest bid received was $8,353,500, by Dominion Exploration and Production, and partner Nexen Petroleum Offshore U.S.A., for Garden Banks Block 337. About 39% of the tracts that received bids are in ultra-deep water and qualify for royalty relief consideration. The most active bidders were Kerr-McGee, making 53 bids; Amerada Hess with 52; and Pioneer Natural Resources, with 42.

The National Ocean Industries Association adds that, in its recently published Final Notice of Sale package for Sale 184, the Minerals Management Service issued royalty relief guidelines and other stipulations for new leases purchased in the sale. Within the notice, the agency included several stipulations that were not in the Proposed Notice of Sale.

Most prominent among the newly revealed stipulations were requirements that seismic surveyors post trained observers to visually scan the ocean for whales, cease operations when a whale is detected in a 180-decible impact zone, and wait for the whale to leave the area. Other related whale details and specific stipulations for avoiding brown pelican nesting colonies with aircraft were included.  

Comments? Write: snyderr@worldoil.com