What's new in production

	Vol. 226 No. 4
ROBERT E. SNYDER, EXECUTIVE ENGINEERING EDITOR

$5 oil and 50¢ gas. In November 1972, World Oil’s respected Editorial Director Donald Kliewer wrote an editorial pleading for increased oil/gas prices to stimulate domestic reserves and corresponding energy supplies. In mid-1972, oil and gas prices were running about $3.35/bbl and 34¢/Mcf. In his editorial, Mr. Kliewer said: 

“Despite all the comments flowing from Washington, there never has been more than one answer to the ridiculous problems of blackouts, brownouts and all the other signs of US energy “giving out.” The domestic petroleum industry must be regenerated – by restoration of economic incentives – to a point where producing rates from already-proven reserves can supply most of our energy needs until R&D provides keys to other potential energy forms. 

“That simply means gas and oil are going to have to provide the major part of our energy supply base for another half century, and a sizable share of our energy needs even beyond then. And the industry can do just that. 

“With proven domestic reserves pegged at 250-290 Tcf natural gas and 35-38 Bbbl crude oil, any energy shortage from curtailed production is ridiculous – and an indictment of our national policies. To round out the complete story, one also must consider the energy supplies that economic incentives can make available from “potential” US reserves ranging to an estimated 700 Tcf gas and 100 Bbbl + crude oil. 

“Our energy crisis is our most “studied” problem. Yet, the federal government has not produced a single piece of action to ease the crisis. Nor is federal talk about reducing demand going to solve anything. After the US has developed an unmatched standard of living, federal politicians now speak about “going backward” from air travel to rail and bus, going from autos to mass transit, and to other more efficient energy-consuming processes. But these same folks don’t estimate the cost or desirability of “going back.” They don’t have anything to say about whether consumers really want to reverse the national living standard direction. 

“Consumers should be told that this nation has the petroleum energy it needs waiting to be found and waiting to be produced. And we have an industry capable of doing both. 

“What develops is going to depend on whether we can face reality long enough to recognize the absolute and immediate need to raise the price of gas to at least 50¢/Mcf and crude oil to at least $5/bbl. No more studies needed about that.” 

Well, 32 years later, with more than 10X the price Kliewer called for, our proven reserves are only 21.8 Bbbl crude and 189 Tcf gas. No small part of this dilemma is that we (and the rest of the world) continued to “blow off” cheap gas to get that more easily transportable crude, with the bottom line that we were/and are exploiting valuable reservoir gas with no regard to its critical aid to increased crude reserve recovery, thus cutting the in place reserves of both.

World’s largest offshore platform. In late February, US Interior Secretary Gale Norton joined BP officials in dedicating the world’s largest and most advanced semi-submersible oil platform, which will be used to tap into a “huge” oil/gas reserve in the Gulf of Mexico. The Thunder Horse platform is about 50% larger than the world’s next largest floating semi-sub rig. It includes advanced technology to process 250,000 bopd and 200 million cfd gas. 

At a development cost of about $5 billion, the new platform features more than 100 technological firsts, including a new generation of engineering solutions to handle the challenges of tapping into an ultra-deep, HPHT reservoir. “With increasing amounts of our oil imported from abroad, these technologies are vitally important to our nation’s future energy security,” Norton said. “It is amazing that so large a structure as Thunder Horse will have such a tiny environmental footprint, leaving almost no trace of itself in either the sea or the sky,” she added. 

Under the President’s National Energy Plan, the Interior Department has been providing incentives such as royalty relief to energy companies to take the financial risk of exploring in deepwater and deep-shelf areas of the Gulf. The Department expects these incentives to help boost peak oil production from the Gulf by 43%, and gas production by 13% over the next decade. The Thunder Horse area, 150 mi offshore Texas, has the potential to produce 1 billion Boe over its field life, making it the largest discovery in the Gulf to date.

Boots & Coots controls seven Iraqi well fires. Boots & Coots’ fire fighting response team is safely back in the US after extinguishing seven well fires resulting from sabotage by insurgents in Northern Iraq. Blowouts caused by sabotage or external forces have a more difficult damage profile than those that occur due to “normal” drilling or production operations. Efforts were further complicated by the remote location and security/ logistical issues. The team worked closely with Northern Iraqi Oil Co. personnel to extinguish and cap the Kabaz field wells in less than 90 days. 

On November 11, 2004, the operator contacted Boots & Coots after saboteurs exploded seven wells in Khabbaza. The company sent a crew of five on November 15 to assess the damage and provide emergency response services. On February 15, the last fire had been extinguished and the crew started home. 

Boots & Coots says its team has developed a good working relationship with Northern Iraqi Oil, and “they know they can trust us to be there at a moment’s notice. We’re proud of the work we do, and we hope to play an ongoing role in helping revive and restore that country’s petroleum infrastructure.” The fire fighter’s CEO said further, “Our teams are the best at what they do and given the recent activity level, they won’t be idle for long. Our domestic response business has also been very active – we need them here.” 

New semi delivery. GlobalSantaFe Corp. announced delivery in Singapore of its newbuild ultra-deepwater semi-sub rig, GSF Development Driller II, on February 23. The rig is scheduled to begin sea trials in the US Gulf in late May, and commence a three-year contract with BP for its Atlantis project in July. 

The contractor expected delivery of its other ultra-deepwater semi, GSF Development Driller I, in March. The rig is scheduled to begin sea trials in the US Gulf in June, and begin a two-year multi-well exploration/ development program for BHP Billiton in July.