2008 Invited Organization is SUT

Founded in 1966 and headquartered in London, the Society for Underwater Technology (SUT) brings together various organizations and individuals from over 30 countries within its 1,800 members. The organization has branches in Houston, Rio de Janeiro, Brazil, and Perth and Melbourne, Australia.

“SUT was chosen as the Invited Organization by OTC Chairman Don Vardeman, who had become familiar with the group through his activities on geohazards,” said Ian Gallett, SUT chief executive. He saw SUT as the perfect group to showcase for OTC because it brings together the science side of the offshore area such as geology, geotechnical and geophysics, as well as the facilities engineering side of the business.

“The growth of subsea solutions as oil and gas are sought in ever deeper waters and in harsher environments has led to an expanded interest in subsea solutions in the Gulf of Mexico, West Africa, Brazil and the Far East,” Gallett said.

Is rust more evil than depletion?

In a Monday OTC topical luncheon, Matt Simmons discussed the aging of energy infrastructure. He also dovetailed to his now famous theme of peak oil-that is, a permanent, global decline in oil supply. The short answer to the title of his speech, and this writing, is: If one doesn’t get you, the other one will. Along the way, Simmons unambiguously said that “peak oil is not a forecast-it’s a reality.”

US offshore production faces multiple challenges

Tony Vaughn, Devon Energy’s vice president and general manager for the Gulf of Mexico (GOM)presented an overview of the GOM production history and the challenges that the deepwater component of the industry faces as it moves forward with development. His presentation defined the significant technical, commercial and execution challenges GOM operators face, as they work the Lower Tertiary trend.

Not only are new wells being drilled in deeper water, but they are being drilled through longer salt sections (as much as 15,000 ft of salt) to reach the oil-productive sediments below. Deepwater technical challenges include imaging below the salt, reservoir characterization with limited data, ever deeper water depths, high pressures under the salt canopy, long completion intervals, flow assurance through long water columns, artificial lift, well intervention, subsea separation and subsea pumping.

Tomorrow’s energy challenges

Meeting the world’s growing energy needs and reducing environmental impact will take investment in technology and fiscal policy that encourages exploration and production, according to the panelists at Wednesday afternoon’s OTC general session. The panel focused on the challenges facing the private and public sectors in meeting demand while addressing concerns about energy security and climate change.

Partnership provides 10-yr funding for deepwater R&D

Structural changes in the oil and gas business in the 1990s altered the character and funding of research into oil industry problems, according to Christopher Haver, Deepstar Director for Chevron.

During the 1990s, the oil companies closed their research facilities and outsourced R&D to the service sector. This led to a focus on applied research and incremental advance, rather than significant breakthroughs in new oilfield technology. The US government recognized the need to fund basic research to overcome the larger problems faced by industry and passed the Energy Policy Act of 2005 that allocated multi-year funding for research, development, demonstration and commercialization of new technology breakthroughs.

RPSEA won the contract to distribute $50 million/yr in funding over the next 10 years for unconventional resources, small producer optimization and ultra-deepwater projects. The goal is to generate a longer term vision, leverage expertise and resources, and pursue a longer term vision for the industry, looking out 10-15 years.

Challenges of CO₂

What to do with CO₂ emissions following oil and gas exploration is a primary issue among oil companies. Proposed solutions include injection into subsea salt caverns and saline aquifers or injecting them several hundred meters below the seafloor.

Saline aquifers provide the greatest potential storage capacity, according to Sally M. Benson with the Global Climate Energy Project (GCEP) at Stanford University. There are several advantages to this storage method, including the fact that saline aquifers are widely distributed and are located with many CO₂ sources. They offer the potential to store on the order of up to 104 billion tons of CO₂, which could provide the capacity for storage of hundreds of years or more of the current CO₂ emission from fossil fuels.

HPHT well completion session an informative affair

Tuesday’s high-pressure, high-temperature (HPHT) well completion technology afternoon session examined both new equipment and case studies.

Authors from Halliburton and Electrochemical Systems presented a new rechargeable battery system that can be used downhole in high-temperature areas. The battery deviates from traditional lithium batteries by consisting of a molten salt core that is safer and more effective than lithium cores. Lithium batteries generally won’t function over 60°C due to internal pressure problems and chemical instability. The molten salt battery, however, will function at temperatures up to 130°C.

Arctic projects require in-depth design and planning

Tuesday afternoon’s Arctic Technology session focused on the challenges faced during the field development, construction and execution of the Oooguruk project located in the Alaskan Beaufort Sea. The session was significant at this year’s OTC because the Arctic is considered the industry’s next frontier, but answers to many of the challenges presented by the harsh Arctic environment still are unknown.

The Oooguruk project answered some of those questions. In the winter of 2004, Pioneer Natural Resources and Armstrong Oil & Gas drilled three wells in Harrison Bay, northwest of the Kuparuk River. It was determined that the resource was economical to develop after analyzing the well results and subsequently acquiring well and geological data over the area.

Frank assessment of PEMEX

Jesús F. Reyes-Heroles, Director General, Petróleos Mexicanos (PEMEX), issued what amounted to a “state of PEMEX” address when he keynoted the 2008 OTC Awards luncheon.

“On the global front, PEMEX is the largest offshore oil producer in the world and one of the three largest suppliers of crude oil to the US,” Reyes-Heroles said. “Nationally, the company is the sole producer of crude oil, natural gas and refined products and the most important source of government income.”

PEMEX’s main operational goals include: the objective to maintain production of 3.1 MMbpd until 2012; 100% reserve replacement ratio by 2012/2013; reestablish reserve/production ratio to 10 years; maintain gas production increases above demand growth; reduce gasoline imports; and produce fuels with better environmental qualities.