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December 2018/January 2019

World
World Trends
Trends and
and Technology
Technology for
for Offshore
Offshore Oil
Oil and
and Gas
Gas

GLOBAL MARKET
OUTLOOK

TOP OFFSHORE PROJECTS


GULF OF MEXICO UPDATE

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• CONTENTS

International Edition
Volume 79, Number 1
Celebrating 60 Years of Trends, Tools, and Technology

project sanctioning. In fact, greenfield project commitments have risen

26
every year since 2016. The year 2018, for its part, is likely to close with
over $85 billion of greenfield project commitments.

The upturn is now��������������������������������������������������������������������35


What a wild ride it has been. In our view, major industry changes were
needed – collaboration, cooperation, and standardization to name a
few. And customers have awoken to the idea of increased collaboration.
The oil companies now understand the need for change.

Floating production market outlook strengthens���������������37


The floating production market outlook continues to strengthen,
making this the third year in a row that more than 50% of survey re-
spondents expressed positive sentiment (somewhat confident to highly
confident), according to EMA’s annual Global Floating Production
• TOP OFFSHORE PROJECTS
Shell’s Kaikias achieves reduced cycle time, lower costs� 24 Industry Survey.
Shell has demonstrated what is possible in terms of lower costs and Boom in US offshore wind to boost America’s
reduced cycle times with its Kaikias project in the deepwater Gulf of energy suppliers����������������������������������������������������������������������41
Mexico. In May, the company announced that it had started production Six East Coast states – Massachusetts, New York, New Jersey, Rhode
at the Kaikias project about one year ahead of schedule. Cycle time Island, Connecticut, and Maryland – are proceeding with firm plans for
from discovery to production for Kaikias phase one was less than four almost 10 GW of offshore wind power by 2030. Analysis shows it will
years. require close to $50 billion in capex to bring this new capacity online,
which will supply steady, market-priced offshore wind power to light
World’s largest spar platform opens deepwater production
offshore mid-Norway���������������������������������������������������������������26 up boardwalks and boardrooms for consumers and businesses up and
Equinor and its partners commissioned the world’s largest spar plat- down the Atlantic seaboard.
form, and the first to feature production/storage of condensate, for the
deepwater Aasta Hansteen development in the Norwegian Sea. This • GULF OF MEXICO
and the Polarled export pipeline should advance development of other Operators make handful of important deepwater
formerly stranded gas fields in the region. discoveries in 2018������������������������������������������������������������������44
The outlook for deepwater drilling in the Gulf of Mexico has been slow-
Shah Deniz 2 marks starting point for the ly improving over the past year. The number of drilling rigs in the Gulf is
Southern Gas Corridor�����������������������������������������������������������30 up by four, from 19 to 23, compared to last year, according to the Baker
The BP-led Shah Deniz consortium started up the Shah Deniz Stage Hughes rig count of Dec. 14, 2018. And, operators reported finding a
2 project in the Azeri sector of the Caspian Sea on June 30, 2018. The number of new and important oil discoveries in the deepwater US Gulf
$28-billion project is the first subsea development in the Caspian Sea in 2018.
and the largest subsea infrastructure operated by BP worldwide. It is
also the starting point for the Southern Gas Corridor series of pipelines Status of US Gulf of Mexico deepwater discoveries����������46
that will for the first time deliver natural gas from the Caspian Sea Get the latest updates of US Gulf of Mexico deepwater discoveries
direct to European markets. sorted by field name, year of discovery, water depth, operator, onstream
status, and production facility type.
• OFFSHORE OUTLOOK Producing wells declining in the shallow-water
Offshore is back – and shallow water is no exception�������33 Gulf of Mexico��������������������������������������������������������������������������50
The offshore industry weathered the storm of low oil prices by cutting In the fourth part of this five-part series on Gulf of Mexico well trends,
costs and sanctioning fit-for-purpose scopes. Now with the worst of the producing and idle wells in the shallow water and deepwater are
downturn behind, the industry appears ready to start a new wave of examined.

Offshore® (ISSN 0030-0608). Offshore is published 12 times a year, monthly, by PennWell® Corporation, 1421 S. Sheridan, Tulsa, OK 74112. Periodicals postage paid at Tulsa, OK 74112 and
at additional mailing offices. SUBSCRIPTION PRICES: US $127.00 per year, Canada/Mexico $165.00 per year, All other countries $208.00 per year (Airmail delivery $292.00). Worldwide digital
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All rights reserved. Reproduction in whole or in part without permission is prohibited. We make portions of our subscriber list available to carefully screened companies that offer products and
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Sheridan Rd., Tulsa, OK, 74112. Printed in the USA. GST No. 126813153. Publications Mail Agreement no. 40612608.

4 WWW.OFFSHORE-MAG.COM | OFFSHORE   DECEMBER 2018/JANUARY 2019

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 CONTENTS

Volume 79, Number 1

 PRODUCTION OPERATIONS
COVER: This year is shaping up to be a good one in the US Corrosion management critical to
Gulf of Mexico, with the first increase in drilling in four years; first-ever long life of offshore assets................76
production from a Jurassic play; key new project sanctions; and an
uptick in M&A all in the cards, according to a recent report from Wood
Early detection and treatment of corrosion
Mackenzie. The firm projects that the new year could usher in more can help the optimize safety, life cycle cost
than $10 billion of investment into the region, setting the stage for and uptime of new and converted offshore
years to come. One major Gulf of Mexico project that came online in facilities. However, life-cycle cost approaches
November was Chevron’s Big Foot project (cover photo), which uses must align with the differing commercial driv-
a 15-slot drilling and production tension-leg platform, said to be the ers for the project and operational teams.
deepest of its kind in the world. (Photo courtesy Chevron)
Virtual reality provides springboard
 GEOLOGY & GEOPHYSICS for rebounding offshore capital ....... 79
Multi-client surveys highlight opportunities offshore Africa .................................. 53 Digitalization has emerged as a powerful lever
In today’s economic climate, large multi-client surveys are becoming increasingly popular for for helping oil and gas operators reduce costs
both exploration and development teams. Since costs can be shared and larger surveys ac- and improve efficiencies amid the low-price
quired for a better overall view of the prospect, they provide a cost-effective means of acquiring environment. This is particularly the case in
high-quality data. the offshore sector, where long development
cycles, high capex and opex, and added safety
Exploration returning offshore Mozambique with prospect of oil risks present unique challenges that are often
in emerging plays ......................................................................................................... 57 not encountered in onshore projects. Apply-
Recent analysis of sea surface oil slicks and new 2D seismic data suggest the elements are in place ing technologies such as virtual reality and
for a major offshore oil play in the Mozambique Channel and East Zambezi basin. Mozambique’s digital twins can unlock value and savings.
government hopes to generate a similar level of exploration in these areas to the drilling
campaigns farther north that led to various giant deepwater gas discoveries.  EQUIPMENT & ENGINEERING
UAVs bring offshore inspection into
the digital age..................................... 82
 DRILLING & COMPLETION
Industry advances managed pressure drilling solutions ....................................... 61 Anti-Two Block system reduces risk
Oilfield equipment providers and downhole service firms are raising the bar for managed pres- of dropped loads ............................... 83
sure drilling technologies and systems. These new technologies will be of considerable interest
to offshore operators and drilling contractors as they face increasingly challenging deepwater Clock Spring introduces zero-
reservoirs. emission gasket................................. 84
Artificial intelligence improves real-time drilling data analysis ............................. 63
Mobile command center enhances
Well delivery may be the mother of all exploration processes. Since Colonel Drake’s first commer-
inspection capabilities ...................... 84
cial oil well in Pennsylvania 150 years ago, drilling has been one of the most critical and costly
exploration and production activities. Today, artificial intelligence is making a difference in a Wide-ranging environmental factors
discipline looking for major improvement. impact offshore moorings design ... 85
OCTG workover risers in deepwater: An alternative solution to drill pipe ........... 66
Remote metrology now available ‘on
Designing a pipe and connection for the highly critical workover/completion/landing riser harsh
demand’ .............................................. 86
environment involves satisfying both difficult service conditions and stringent ruling standards.
A new high-performance threaded and coupled riser connection allowed for a solution able to
meet both the difficult environment of 25 M&Bs in a NACE region 3 environment with 15,000 psi
working pressure as well as allow for a lower cost versus drill pipe style.
DEPARTMENTS
 ENGINEERING, CONSTRUCTION, & INSTALLATION Online ...................................... 8
Disconnectable transfers critical to drilling vessel conversions ........................... 70 Comment ................................. 10
Converting a drillship to an FPSO can be more cost-effective than building a newbuild floating Data ....................................... 12
or fixed platform for marginal fields or for early production purposes. Disconnectable transfer Global E&P ............................... 13
systems are a necessity for projects in harsh offshore environments. Offshore Europe ......................... 15
Gulf of Mexico........................... 16
Integrated supplier-led solution improves deepwater project economics ........... 72 Subsea Systems ......................... 17
In the industry’s quest to maintain profitable oil and gas developments, adopting an integrated Vessels, Rigs, & Surface Systems ... 18
supplier-led solution (SLS) is becoming a key component. It introduces opportunities to provide Drilling & Production................... 20
a more open approach to the design and engineering process and more access to information Offshore Wind Energy .................. 22
about the reservoir. Adopting an integrated SLS approach also enables comparison of various Business Briefs ....................... 101
concepts and optimizations not only in terms of cost, but also the production and revenue a Advertisers’ Index .................... 103
concept will deliver. Beyond the Horizon ................... 104

6 WWW.OFFSHORE-MAG.COM | OFFSHORE DECEMBER 2018/JANUARY 2019

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 ONLINE

LATEST NEWS AVAILABLE AT OFFSHORE-MAG.COM VP AND GROUP PUBLISHING DIRECTOR


Paul Westervelt pwestervelt@pennwell.com
The latest news is posted daily for the offshore oil and gas industry covering tech-
nology, companies, personnel moves, and products. CHIEF EDITOR/
CONFERENCES EDITORIAL DIRECTOR
NEW ON-DEMAND WEBCAST David Paganie davidp@pennwell.com
Top Offshore Projects: Leading strategies in capital efficiency MANAGING EDITOR
Bruce A. Beaubouef bruceb@pennwell.com
After a prolonged market downturn, offshore field development projects are once
EDITOR-EUROPE
again moving toward first oil. Higher oil prices, cost reductions, technological break- Jeremy Beckman jeremyb@pennwell.com
throughs and strategic engineering have enabled operators to sanction their deepwater ASSISTANT EDITOR
developments.  Jessica Stump jessicat@pennwell.com
In this year’s “Top Offshore Projects” webcast, sponsored by Bentley Systems, POSTER EDITOR
Calpipe Industries, LLC, and Wood, the Offshore editors select the projects that have E. Kurt Albaugh, P.E. Kurt.albaugh@yahoo.com

successfully been re-engineered and restructured to succeed in today’s marketplace, EDITORIAL CREATIVE DIRECTOR
Jason Blair
and will the describe the new technologies and engineering methods that have
PRODUCTION MANAGER
enabled these projects to move forward.  Shirley Gamboa shirleyg@pennwell.com
https://www.offshore-mag.com/webcasts/offshore/2019/01/top-offshore-projects-leading-strat-
MARKETING MANAGER
egies-in-capital-efficiency.html Myla Lowrance mylal@pennwell.com
NEW MAPS, POSTERS, AND SURVEYS AUDIENCE DEVELOPMENT MANAGER
• 2019 Status of US Gulf of Mexico Deepwater Discoveries Emily Martin emilym@pennwell.com
• 2019 Gulf of Mexico Map
OFFSHORE EVENTS
• 2018 Environmental Drilling and Completion Fluids Survey David Paganie (Houston) davidp@pennwell.com
• 2018 Worldwide Survey of Floating Production, Storage and Offloading Units Gail Killough (Houston) gailk@pennwell.com
• 2018 MWD/LWD Services Directory
• 2018 World Survey of Stimulation Vessels
• 2018 Offshore Mexico Map www.pennwell.com
• 2018 Deepwater Solutions & Records For Concept Selection
OFFSHORE
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size does matter

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• COMMENT

New opportunities boost


offshore market outlook
DAVID PAGANIE, CHIEF EDITOR

A NEW OFFSHORE is taking shape. Offshore oil Global Floating Production Industry Survey, produced last year in
and gas exploration and production activity appears partnership with Offshore. More than 50% of the respondents ex-
to be on pace for steady, incremental growth for pressed positive sentiment in the market outlook. The percentage
the foreseeable future as operators seem intent to of respondents who are highly confident rose from 10% last year
sustain capital discipline. Meanwhile, offshore wind to 23% this year. Geographically, Brazil and West Africa ranked as
development activity is set to accelerate as demand the top two growth regions. Another notable finding of the survey
increases for renewable power generation. is the type of technology that is expected to have the greatest
impact on the offshore industry. The results were unmanned
OIL SUPPORTS WIND production facilities and long-distance subsea tiebacks as a close
Offshore readers may know that oil and gas industry companies first and second. See the full survey results and five-year floating
have played an integral role in developing the offshore wind industry production forecast, by David Boggs, EMA, beginning on page 37.
in Europe. A similar transfer of skills, knowledge, and financial
resources is well under way in the US, as states, mainly on the East TOP PROJECTS DELIVER CAPITAL EFFICIENCY
Coast, seek to increase the percentage share of renewables in their Also inside this issue, Offshore presents the recipients of the annual
energy mix. Energy companies with roots in oil and gas, such as Top Offshore Projects award. The projects were once again selected
Equinor and Shell, are taking the lead. Last month, both Equinor that exhibited leading strategies in capital efficiency. The winners
and Mayflower Wind Energy (50:50 JV between Shell New Energies also displayed a commitment to technological innovation while
US LLC and EDPR Offshore North America LLC), won rights to pushing the boundaries of upstream development. The winners
leases in federal waters off Massachusetts for $135 million. The in no particular order are: Shell-operated Kaikias in the US Gulf of
other lease in the BOEM auction was sold to Vineyard Wind for Mexico, Equinor-operated Aasta Hansteen in the Norwegian North
$135.1 million. In 2017, Equinor won a lease for $42 million off New Sea, and BP-operated Shah Deniz 2 in the Caspian Sea. The project
York. The three lease areas off Massachusetts that were sold for reports begin on page 24. A special webcast presentation of the
$405.1 million, were previously auctioned as two leases in 2015 and award-winning projects will be available at offshore-mag.com.
drew no interest – a clear sign of developer confidence in the market All in, the offshore outlook is increasingly optimistic, especially
outlook. Analysts suggest that there are firm plans for almost 10 for the companies that can develop and support both offshore
GW of offshore wind for the US which could require about $50 conventional and renewable resources. Offshore is committed to
billion in capex to bring this new capacity online, according to keeping readers informed of the latest developments in offshore
Stephanie McClellan, University of Delaware. See Stephanie’s US renewables. Industry news will be posted daily to the magazine
offshore wind market outlook beginning on page 41. website and beginning with this issue, a front-of-book column will
cover the latest technology and trends in offshore wind. Readers
GREENFIELD SANCTIONING IMPROVES SENTIMENT can expect the same editorial commitment to timely market in-
Still, the oil companies that are engaged in the energy transition telligence, news, executive interviews, and in-depth analysis that
will continue to allocate the bulk of their capital to oil and gas Offshore has produced for the oil and gas industry for over six
development. The focus offshore will continue to be on brownfield decades. Another new feature that Offshore is rolling out is an
developments, but greenfield activity is making a comeback as enhanced magazine layout to improve readability in print and
development costs remain low. Last year was expected to close digital format. Readers may notice some minor tweaks to the new
with over $85 billion in greenfield sanctions, according to Oddmund design throughout the year, and comments are welcome. Happy
Føre, Rystad Energy. This is a 25% increase over 2017 commitments. New Year!
Looking ahead, Rystad forecasts an average of $100 billion in project
sanctions over the next three years. And an increasing share of the
capital will be allocated to shallow water developments from
smaller operators. Oddmund’s global offshore spending outlook
begins on page XX.
A beneficiary of this trend in greenfield sanctioning are the
floating production system contractors. The companies in this To respond to articles in Offshore, or to offer articles for publication,
market segment are gaining confidence, according to EMA’s annual contact the editor by email (davidp@pennwell.com).

10 WWW.OFFSHORE-MAG.COM | OFFSHORE   DECEMBER 2018/JANUARY 2019

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 DATA F1: WORLDWIDE OFFSHORE RIG COUNT AND UTILIZATION RATE
DECEMBER 2016 – NOVEMBER 2018
1,000 100
Worldwide offshore rig
count and utilization rate 900 90
The month of November saw very few
changes in the offshore rig market with 800 80

Fleet utilization rate, %


nearly every category remaining flat. The

Number of rigs
total number of jackups, semis, and drill-
700 70
ships under contract held steady at 433
rigs, which is the same as October. Mean-
while, only one rig has been removed from 600 60
the global fleet, taking the total supply to
a total of 767. As a result, rig utilization re- 500 50
mained effectively the same at 56.4% in
November. Nearly the same can be said 400 40
for the number of rigs working, which had a
one-unit decline this month to a total of 400.
300 30
Dec. Feb. Apr. Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct.
– Justin Smith, Petrodata by IHS Markit 2016 2017 2018

Total utilization Total supply Total under contract Working


Note: Rig types included are jackups, semis, and drillships
Source: IHS Markit RigPoint

F2: OPEC-14 (EXCL. QATAR) CRUDE PRODUCTION, MONTHLY


OPEC+ production cuts 34.0
Opec-14 (previous, “status quo”)
will not be enough 33.5 Opec-14 (new forecast, cuts extended through 2019)
OPEC+ will need to stay 700,000 b/d Target production 1H-19*
below its agreed targets of 31.8 MMb/d 33.0
through 2019 to bring a recovery in Brent 32.5
Million barrels per day

prices to the $70 level, according to ana-


lyst Rystad Energy. On Dec. 7, 2018, the 32.0
OPEC countries and Russia agreed to cut
31.5
oil production by 1.2 MMb/d in 2019.
Head of oil market research Bjornar 31.0
Tonhaugen said: “...The agreed production
cuts will not be enough to ensure sustained 30.5
and immediate recovery in oil prices…” 30.0
The analyst added that OPEC+ suc-
ceeds in preventing massive over-supply 29.5
in the first half of 2019 and in putting a soft
floor under oil prices for now. If production
Oct.
Dec.
Feb.

Apr.
June
Aug.
Oct.
Dec.
Feb.
Apr.
June
Aug.
Oct.
Dec.
Feb.
Apr.
June
Aug.
Oct.
Dec.
cuts by OPEC and Russia are extended
through 2019, the market can balance. 2016 2017 2018 2019
*Production target if only including the target cuts (–800,000 bpd) for the non-exempt countries (’OPEC-11’) including a 400,000
bpd cut for Saudi Arabia.

Source: Rystad Energy research and analysis, OilMarketCube December 2018. Oil Market Balances Report November 2018

Subsea vessel/equipment
F3: GLOBAL SUBSEA VESSEL OPERATIONS AND HARDWARE
spending set to rise
Westwood forecasts total subsea vessel EXPENDITURE AND VESSEL DAY DEMAND, 2014-23
operations and hardware expenditure 50 100
Hardware - line pipe Vessel ops expenditure
globally of $152 billion during 2019-2023,
45 Hardware - SURF Vessel day demand 90
in a new report. Over the forecast period, Hardware - XT + TMFJ
subsea hardware will account for 64% 40 80
($97.6 billion) of expenditure, with subsea
Vesl days (thousands)

35 70
Expenditure ($bn)

vessels operations accounting for the re-


maining 36% ($55.4 billion). 30 60
Subsea tree installation is set to grow
at a 6% CAGR over the 2019-2023 period 25 50
led by Petrobras’ investments in the San- 20 40
tos basin and Equinor’s commitments to
projects in the Barents Sea and North Sea. 15 30
Also, more than 18,482 km (11,484 mi) of 10 20
line pipes are set to be installed over the
period, amounting to $44.7 billion in both 5 10
material and installation costs. 0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: Westwood

12 WWW.OFFSHORE-MAG.COM | OFFSHORE DECEMBER 2018/JANUARY 2019

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JEREMY BECKMAN
LONDON GLOBAL E&P •

NORTH AMERICA (355-km) Rota 3 gas export pipeline system, also in the presalt
The US’ Bureau of Ocean Energy Management (BOEM) has Santos basin. The nearshore section will connect to the line’s
conditionally approved what would be Alaska’s first oil and gas onshore segment at Maricá City, 62 mi (100 km) north of Rio
development in federal waters. Hilcorp Alaska plans to construct de Janeiro.
a 9-acre (3.6-ha) gravel island in shallow water in the Beaufort ***
Sea, 5 mi (8 km) offshore and 20 mi (32 km) east of Prudhoe Guyana’s government has approved Total’s farm-in to 25% of
Bay. The approval terms include drilling into the hydrocar- the offshore Orinduik block, where drilling is due to start next
bon-bearing zone solely in solid ice conditions, and seasonal year. Total committed to join existing partners Tullow Oil and
restrictions on offshore work and vessel traffic to limit the Eco Atlantic are analyzing processed data from a recent 2,550-
impact on local whaling activities. sq km (984-sq mi) 3D survey over the concession. Tullow will
*** remain as operator.
Four companies applied successfully for offshore exploration ExxonMobil has contracted TechnipFMC to engineer and
licenses under the 2018 bid rounds staged by the Canada-New- manufacture subsea production equipment for the Liza Phase
foundland and Labrador Offshore Petroleum Board (C-NLOPB). 2 project in Guyana’s deepwater Stabroek block. The delivery
BHP secured outright control of two parcels in the frontier will include 30 enhanced vertical deepwater trees, eight man-
Eastern Newfoundland region, while Equinor will operate two ifolds and associated controls and tooling. The project’s location
more in separate partnerships. Suncor Energy and Husky Oil is 193 km (120 mi) offshore in water depths of 1,500-1,900 m
will join Equinor in another parcel in the Jeanne d’Arc region. (4,900-6,200 ft).
Sums pledged for the licenses’ initial periods totalled over $1.38 ***
billion. Premier Oil has awarded Dril-Quip (Europe) a front-end engi-
*** neering design (FEED) contract and frame agreement to provide
BP terminated its frontier Aspy exploration well offshore up to 30 subsea production systems for Phase 1 of the Sea Lion
Nova Scotia last month as a dry hole, five months after the development in the North Falkland basin. The $207-million
semisub West Aquarius had started drilling operations at the order covers wellheads, horizontal trees, tubing hangers, pro-
location 330 km (205 mi) southeast of Halifax in 2,777 m (9,111 duction and injection manaifolds and subsea umbilicals. A
ft) of water. The program had been interrupted twice, initially formal award will follow a final investment decision (FID) for
due to a leak of synthetic-based mud 30 m (99.4 ft) below the the project, expected in 2019.
sea surface, and later when a severe storm approached. Drilling
had resumed in late July through a side track from the wellhead, WEST AFRICA
with the lower section of the original wellbore cemented and Cairn Energy has submitted the development plan for the
plugged. deepwater SNE oilfield offshore Senegal and expects government
approval before year-end. Woodside Energy will become oper-
SOUTH AMERICA ator of the 500-MMbbl, phased development, which will even-
Oil and gas production has started from the Lula Extremo Sul tually produce 100,000 b/d. First oil through an FPSO with
area in the presalt Santos basin offshore Brazil, via the FPSO subsea wells is targeted for 2022, with commercial gas sales to
P-69. This is the eighth floater on the field and moored in 2,150 Senegal to follow shortly afterwards.
m (7,054 ft) of water, 290 km (180 mi) from the Rio de Janeiro ***
state coast. The facility, which will be connected to eight pro- FEED for Phase 1 of the ultra-deepwater Tortue field LNG de-
ducer and seven injectors, has capacity to process up to 150,000 velopment off Senegal/Mauritania is nearing completion, ac-
b/d of oil and to compress up to 6 MMcm/d of gas. cording to partner Kosmos Energy. Operator BP has submitted
Petrobras has contracted McDermott to design and install the its development plan to the governments of both countries and
ultra-shallow water 6-mi (10-km) section of the new 220-mi a Phase 1 FID should follow around year-end. In parallel, the
partners are progressing the LNG offtake agreement.
***
The drillship Stena DrillMax was due to P&A Samo-1, the first
exploratory well offshore The Gambia for around four decades.
Although the well in block A2 encountered oil shows, the main
target horizons were water-bearing. The government has agreed
to extend the license to mid-2019 to allow operator FAR and
partner Petronas to assess remaining prospectivity in the area.
P-69 recently started
operations on the ***
Lula field. (Courtesy Petrobras is selling its 50% interest in Petrobras Oil & Gas BV,
Petrobras) a joint venture with BTG Pactual E&P, to Petrovida Holdings
for up to $1.53 billion. The latter is co-owned by Vitol Investment

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JEREMY BECKMAN
• GLOBAL E&P LONDON

Partnership II, Africa Oil and Delonex Energy. The sale includes the block’s existing production infrastructure.
an 8% stake in the OML 127 block offshore Nigeria containing ***
the deepwater Agbani oilfield and a 16% share of the OML 130 Shell and Kosmos Energy have formed a strategic alliance to
block, the location for the Akpo and Egina fields. Petrobras’ net jointly explore in southern West Africa. Their initial focus will
share of production from these fields is around 21,000 boe/d. be off Namibia, where Kosmos recently farmed into Shell’s PEL
*** 39 license, and off São Tomé & Principe where Shell is set to
Gabon’s Minister of Oil and Hydrocarbons has opened the farm into Kosmos’ blocks 5, 6, 11 and 12. The duo will also assess
country’s 12th Shallow and Deep Water licensing round, covering opportunities in adjacent geographies, combining Shell’s knowl-
12 shallow and 23 deepwater blocks. The government has revised edge of carbonate plays with Kosmos’ West Africa Cretaceous
its petroleum code to prioritize competitiveness and to accom- experience.
modate oil price fluctuations, with improved fiscal terms. Bids UK independent Tower Resources has signed a petroleum
are due in by April 22, 2019 with awards expected the following agreement with Namibia’s government giving it an 80% operated
month. Spectrum Geo has assembled data-sets for the round interest in offshore blocks 1910A, 1911 and 1912 B, in partnership
based on newly acquired shallow-water 3D seismic surveys. with Namcor and 2M Fourteen Investment CC. The agreement
*** covers a total area of 23,297 sq km (8,995 sq mi) in the little
Total and its partners have sanctioned two new fasttrack subsea explored northern Walvis basin and Dolphin Graben.
developments in the prolific deepwater block 17 offshore Angola.
CLOV Phase 2 calls for seven new wells tied back to the host MEDITERRANEAN SEA
FPSO with first oil set for 2020, peaking at 40,000 b/d. Six more Israel’s Energy Ministry has opened the country’s latest bid
wells will be drilled under Dalia Phase 3, again connected to round for exploration and production of gas in the eastern
the host floater, with oil production starting in 2021 and building Mediterranean Sea. Nineteen blocks are on offer in five zones
to a peak of 30,000 b/d. These two projects and the current off southern Israel: the Ministry believes that marketing the
Zinia 2 development will collectively produce a further 150 blocks in zones should attract greater interest, allowing investors
MMbbl from the block. to conduct more efficient subsurface evaluation.
Angola’s government has expanded offshore block 15/06 by TechnipFMC has contracted Jumbo to transport and install a
400 sq km (154 sq mi) on the west side, with Eni and partner 410-t subsea production manifold for Noble Energy’s Leviathan
Sonangol committed to accelerating exploration via a new gas project offshore Israel. Water depth at the location is 1,643
four-well campaign. If this leads to commercial discoveries, m (5,390 ft) – Jumbo will also install subsea isolation valves and
these will be developed as fasttrack subsea tiebacks through valve skids in shallower water close to the coast.

STATUS OF GAS FIELDS DISCOVERED


OFFSHORE ISRAEL
1 LEVIATHAN GAS FIELD 5 KARISH AND TANIN GAS FIELDS
Discovered - 2010 Discovered - 2012-2013
Operator - Noble Energy Operator – Energean Oil & Gas
Estimated reserves - Estimated reserves -
500 BCM (2P, 2C) 55 BCM (2C)
Status – Under development Status - Under development
5 Water depth – 1650 m Water depth - 1750 m
Production facility - Fixed platform Production facility - FPSO
7 5
2 TAMAR AND TAMAR SW 6 DALIT GAS FIELD
1 2 Discovered - 2009 Discovered - 2009
Operator - Noble Energy Operator – Noble Energy
Estimated reserves - Estimated reserves - 8 BCM (2C)
6 250 BCM (2P) Status - Development on hold
Status – Producing Water depth – 1380 m
Water depth - 1680 m
Zone A Zone B 7 APHRODITE/ISHAI GAS FIELD
Production facility - Fixed platform
Zone C Discovered - 2012
3 SHIMSHON GAS FIELD Operator - AGR/Nammax
Discovered - 2012 Estimated reserves - 7-10 BCM (2C)
3 Zone D Operator - AGR/Isramco (Israeli side)
Estimated reserves - 5 BCM (2C) Status - Development on hold
Status - Development on hold Water depth – 1700 m
Zone E Water depth - 1100 m

Product lease 4 4 MARI B AND NOA GAS FIELDS


Discovered - 1999-2000
Exploration license Operator - Noble Energy
Open block Status – Produced 25 BCM
since 2004
2nd bid round ZOi Water depth – 235 m, 790 m
Production facility - Fixed platform

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JEREMY BECKMAN
LONDON OFFSHORE EUROPE •

TROLL LEADS NORTH SEA UPGRADES mission of gas from eastern Denmark through the Baltic Sea to
Equinor has initiated life extension programs at three of its Poland. Norwegian trunklines operator Gassco will be respon-
largest fields in the North Sea. Work is already under way on sible for the tie-ins – Baltic Pipe will have an overall length of
the NOK7.8-billion ($913-million) Troll Phase 3 development 900 km (559 mi) and will also cross part of Sweden.
following sanction by Norway’s Ministry of Petroleum and In the UK central North Sea, Shell and partners ExxonMobil
Energy. The project involves recovering gas from the western and BP plan a new pipeline export route for gas-liquids pro-
part of the Troll field, 25 km (15.5 mi) northwest of the Troll A duction from the fixed platform serving the HP/HT Shearwater
platform, via eight new production wells connected to two field and various Shell/third-party-operated satellite tiebacks
subsea templates, a 36-in. pipeline and a new processing module sanctioned over the past year. At present, dry gas produced by
on Troll A and powered from the shore. The facilities should the platform, 140 mi (225 km) east of Aberdeen, flows south
prolong the field’s productive lifespan beyond 2050: Equinor through the Shearwater Elgin Area Line (SEAL) to the Bacton
believes this could be one of its most profitable offshore invest- terminal in eastern England. Under the new scheme, Shell will
ments to date, with a projected breakeven cost of less than $10/ modify the platform and install a new 23-mi (37-km) line from
bbl. Subsea contracts have gone out so far to Allseas, DeepOcean, a connection point in the Fulmar Gas Line system to Shearwater.
IKM, Marubeni and Nexans, with Aker Solutions responsible This will allow wet gas to flow into the Shell Esso Gas and
for the topsides campaign. Associated Liquids pipeline to St Fergus, near Aberdeen. SEAL
will continue to transport gas from the HP/HT Elgin field for
processing at Bacon.
In the UK’s southern gas basin, production from INEOS’
unmanned Clipper South platform has begun heading through
another new pipeline to Shell’s Clipper hub in the Sole Pit area.

Lowering of a subsea template at Vigdis North East. (Courtesy


Equinor/André Osmundsen)

Front-end engineering design is under way for the Gudrun


Phase 2 water injection scheme at Aibel’s offices in Haugesund
and Stavanger. Aibel is assessing integration and hookup needs,
the aim of the project being to extend and increase recovery
from the Gudrun field’s reservoir. On completion of the study
The Clipper South platform. (Courtesy INEOS)
this June, Aibel will likely be awarded the implementation
contract. Equinor and its partners have also committed to The change had to be made after ConocoPhillips decided to
improve recovery from the subsea Vigdis field which has pro- shut down the LOGGS pipeline system and the Theddlethorpe
duced over 400 MMbbl through the Snorre A facilities over the terminal that previously received the platform’s gas. Production
past two decades. A subsea boosting station will be connected from Clipper is sent to Bacton, where Shell and ExxonMobil
to the pipeline to enhance throughput, also allowing wellhead completed a £300-million ($379-million) overhaul in 2017, al-
pressure to be lowered which should increase flow from the lowing the facility to handle more gas from offshore fields in
wells. Estimated cost of the program, which also entails mod- the area.
ifications to Snorre A and B (the latter supplying power to the
boosting station’s umbilical) is around NOK1.4 billion ($164 UK WELL DECOMMISSIONING COSTS DOWN
million). OneSubsea will supply the boosting system and asso- Oil & Gas UK forecasts annual decommissioning expenditure
ciated subsea template. for UK fields of around £1.5 billion ($1.9 billion) over the next
decade. This is 20% lower than its previous report in 2017, and
NORTH SEA, BALTIC GAS LINES MOVE AHEAD lower well decommissioning costs are a major factor. Among
Polish and Danish gas transport operators Gaz-System and the latest findings, 1,465 wells are set to be decommissioned
Energinet have committed to the Baltic Pipe, which will take over the next 10 years, representing around one-fifth of the UK’s
gas from Norwegian fields to Denmark via a connection to the total well stock. For some projects, average time spent on well
Europipe II pipeline. Another new line will extend the trans- decommissioning has halved throughout its life cycle. •

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BRUCE BEAUBOUEF
• GULF OF MEXICO HOUSTON

CHEVRON BRINGS BIG FOOT ONLINE


Chevron Corp. has started crude oil and nat-
ural gas production from the Big Foot deep-
water project in the US Gulf of Mexico. The
field is located about 225 mi (360 km) south
of New Orleans, in a water depth of about
5,200 ft (1,584 m).
Discovered in 2006, the Big Foot field is
estimated to contain total recoverable re-
sources of more than 200 MMboe and has a
projected production life of 35 years.
The project uses a 15-slot drilling and
production tension-leg platform, said to be
the deepest of its kind in the world, and is
designed for a capacity of 75,000 b/d of oil
and 25 MMcf/d of natural gas.
“The Big Foot project strengthens Chev-
ron’s deepwater portfolio and further demon- (Photo: Business Wire)
strates that the Gulf of Mexico is an integral
part of our diverse global portfolio and long-term strategy,” Chevron’s subsidiary, Chevron U.S.A. Inc., is the operator
said Jeff Shellebarger, president of Chevron North America of Big Foot with a 60% working interest. Co-owners are
Exploration and Production. “The project advances our in- Equinor Gulf of Mexico LLC (27.5%) and Marubeni Oil & Gas
terest in safely providing reliable, affordable energy to meet (USA) LLC (12.5%). •
a growing global demand.”

US GULF OF MEXICO POISED FOR HISTORIC YEAR, “Anchor will be an important one to watch,” said Turner. “The
SAYS WOODMAC sanction of Anchor will be a significant milestone for Chevron,
Next year is shaping up to be a good one in the US Gulf of Total and Venari, but also mark a crucial point for the offshore
Mexico, with the first increase in drilling in four years, first-ever industry as it enters the final frontier in deepwater
production from a Jurassic play, key new project sanctions and development.”
an uptick in M&A all in the cards, global natural resources Success at Anchor will lead to the next wave of mega-invest-
consultancy Wood Mackenzie said. ment in the Gulf of Mexico, as several 20-ksi projects are waiting
William Turner, senior research analyst at Wood Mackenzie, to follow its lead. Wood Mackenzie believes that if Anchor
said: “We expect 2019 to be a strong year for the Gulf of Mexico. moves forward, more than $10 billion of investment could flow
In addition to exciting new project sanctions, which could usher into the region.
in more than $10 billion of investment into the region, a couple “Proof of concept at Anchor, and more certainty around
of historic firsts set to occur next year could set the stage for facilities to serve as hosts, will surely increase interest in dis-
years to come.” covered fields,” Turner said. “We expect it will also invite more
In its annual outlook, “US Gulf of Mexico: 5 things to look exploration for ultra-high-pressure targets over the next couple
for in 2019,” WoodMac said that after four years of steady decline, of years. Even so, with higher technical risk and higher breakev-
exploration activity is expected to increase next year by 30%. ens, market conditions would have to align for it to become a
Shell and Chevron will lead the way, but the actual growth in reality.”
exploration will come from new entrants – Kosmos Energy, Shell’s Appomattox development, in Mississippi Canyon
Equinor, Total, Murphy, and Fieldwood. block 392, is due onstream in 2019 – marking the first production
Next year may also mark a crucial point for the offshore ever from a Jurassic reservoir in the Gulf of Mexico. This will
industry, with Chevron’s Anchor project in Green Canyon block be a significant milestone for Shell, as Appomattox is a corner-
807 expected to move forward. Anchor, which has an operating stone of its global deepwater strategy. All eyes will be on the
pressure of 20-ksi, would be the first ultra-high-pressure project well performance of the potential heavy hitter.
in the world to reach final investment decision (FID). FID at “If the Jurassic roars to life in 2019, it could give operators
Anchor would be the culmination of more than a decade of greater confidence in the play’s potential,” Turner said. “However,
multiple joint industry research and development projects to if Appomattox disappoints, the Jurassic could continue to lie
design kit that can safely produce at 20-ksi. The current limit dormant. The wider region would also be missing an expected
is 15-ksi.  strong production growth contributor.” •

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JESSICA STUMP
HOUSTON SUBSEA SYSTEMS •

SUBSEA INTEGRATION ALLIANCE NETS system that includes cloud-based user dashboards and data
SNE PHASE 1 FEED CONTRACT analytics.
Woodside Energy and its partners have agreed to initiate front- According to Siemens, the technology will enable subsea
end engineering design (FEED) for the deepwater SNE oil field processing with multiple seabed power consumers. Potential
development offshore Senegal. This follows the award of the applications include support for enhanced recovery in subsea
subsea FEED contract for Phase 1 of the project to the Subsea brownfield projects and tiebacks, with single- or multi-phase
Integration Alliance of OneSubsea, a Schlumberger company boosting to increase oil recovery.
and Subsea 7. During the initial test phase at Siemens’ test site in Trond-
Woodside, recently approved to assume the role of operator heim, the system operated in a ring loop topology at full load
by the Senegalese Minister of Petroleum, expects further FEED and a test/verification program was run. Initial test results were
contracts to follow in early 2019. positive with all components operating within their design
SNE will produce through a 100,000 b/d-capacity FPSO and parameters. The next phase will involve an extended shal-
subsea infrastructure, with the facilities designed to accommo- low-water test to build operational experience and verify long-
date future development phases, including options for gas term reliability. Siemens’ goal is to accumulate 3,000 hours of
exports to shore and subsea tiebacks from other reservoirs and runtime on the equipment while undertaking further tests.
fields. Phase 1 will target around 230 MMbbl of oil with 11 In parallel, preparations are progressing for a deepwater pilot
producing wells, 10 water injectors and two gas injectors. Start- program under which the equipment will be installed and used
up should follow in 2022. on a subsea field.

INITIAL SUBSEA POWER TEST ÅSGARD SUBSEA COMPRESSORS PASS


DELIVERS PROMISING RESULTS PERFORMANCE MILESTONE
Siemens has finished the first phase shallow-water test of its The subsea compression trains at the Equinor-operated Åsgard
Subsea Power Grid in Trondheim, mid-Norway. The company, field in the Norwegian Sea have delivered 50,000 operational
in collaboration with Chevron, Equinor, ExxonMobil, and Eni hours with an availability of close to 100%.
Norge, is in the final stages of a program of developing what it In 2015, Åsgard became the world’s first subsea gas compres-
claims will become the world’s first seafloor power grid designed sion facility to enter service, 300 m (984 ft) subsea, and featuring
for distribution of medium voltage power using pressure-com- two HOFIM motor-compressor units supplied by MAN Energy
pensated technology. Solutions Switzerland.
Frode Tobiassen, Head of Subsea at Siemens, said: “There Previous analysis had suggested that by the end of 2015 the
will be more subsea compressors, pumps, processing plants, pressure in Åsgard’s reservoirs would have been too low to
and in the future entire production facilities placed on the
seabed, all of which require power.”
The Subsea Power Grid facilities comprise a subsea trans-
former, subsea switchgear, subsea variable-speed drive, subsea
wet mate connectors, and a remote control and monitoring

The Åsgard subsea gas compression facility features two HOFIM


motor-compressor units. (Courtesy MAN Energy Solutions)

ensure stable flows and satisfactory production, hence the need


for compression.The MAN units should help extend the reser-
The Subsea Power Grid will be the world’s first seafloor power grid voirs’ productive life for another 15 years, delivering around 282
designed for distribution of medium voltage power using pressure- MMboe. •
compensated technology. (Image courtesy Siemens)

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JESSICA STUMP
• VESSELS, RIGS, & SURFACE SYSTEMS HOUSTON

DAMEN VEROLME ROTTERDAM wind farms, to service the oil and gas industry, and for the
UPGRADING SAIPEM 7000 decommissioning of offshore installations.
Saipem has contracted Damen Verolme Rotterdam (DVR) to With a total installed capacity of 44,180 kW, the Orion will
upgrade the Saipem 7000’s DP-3 system. be equipped with a Liebherr crane with a lifting capacity of
The upgrade is to meet the new closed ring DP-3 configura- 5,000 metric tons. The loads can be lifted to a height of more
tion and ABS EHS-P notation. Under DP3 EHS-P notation, the than 170 m (558 ft).
vessel is said to achieve an exceptional level of redundancy with The 216.5-m (710.3-ft) long vessel will feature DP-3 capability,
four independent redundancy groups systems. dual fuel engines, and will have a Green Passport and Clean
The project will include the upgrade and modification of the Design notation. It will also have a waste heat recovery system
semisubmersible crane and pipelay vessel’s power system for that converts heat from the exhaust gasses and cooling water
load sharing, the installation of MV, LV and control cables, re- to electrical energy. The evaporation of LNG will cool the ac-
newal of the MV and LV switchboards and the motor control commodation with a cold recovery system.
The Orion is expected to join the fleet at the end of the year.

BP NAMES MAD DOG 2 PLATFORM


BP has chosen Argos as the name of the new floating production
unit for the Mad Dog 2 project in the deepwater Gulf of Mexico.
The name, chosen by the project team and an employee survey,
is a reference to Odysseus’ loyal dog from “The Odyssey,” and a
nod to the Mad Dog spar, an existing production facility operated
by BP that is located about six nautical miles away from the
Argos site.
The Mad Dog 2 project includes the Argos semisubmersible
platform with the capacity to produce up to 140,000 gross b/d
of crude oil through a subsea production system from up to 14
production wells and eight water injection wells.
“Selecting Argos as the name of our newest platform is an
The Saipem 7000 at Damen Verolme Rotterdam. (Courtesy Damen important milestone for the Mad Dog 2 project, which remains
Shipyards Group) on track and on budget,” said Starlee Sykes, BP’s regional pres-
ident for the Gulf of Mexico and Canada. “This project is key
centers, the installation of uninterrupted power supplies and to delivering high-margin production from one of the largest
the creation of an A60 compartment. fields in the Gulf of Mexico, and it will strengthen our position
Detailed engineering is being executed by Damen Verolme
Rotterdam in close cooperation with Saipem.
When completed, the vessel’s DP-3 system with its 12 thrust-
ers will ensure that the vessel can maintain its position in even
the most adverse weather conditions. In addition, because the
Saipem 7000 can accommodate up to 725 people, the vessel
will be able to assist hook-up and commissioning activities as
well as initial platform life support.
The works are expected to take about six months, with
completion due in 1Q 2019. This represents a tight schedule,
Damen said, mainly due to the delivery and installation for the
cables, the switchboards and the extensive structural
modifications. The Argos semisubmersible platform will have the capacity to
produce up to 140,000 gross b/d of crude oil through a subsea
The vessel’s most recent visit to DVR was in April 2018 when production system from up to 14 production wells and eight water
she spent nine days undergoing mobilization activities. injection wells. (Courtesy BP)

OFFSHORE INSTALLATION VESSEL LAUNCHED IN CHINA in the basin for years to come.”
DEME’s offshore installation vessel Orion was successfully The platform will be the first new BP-operated production
launched at the COSCO Qidong shipyard in China. The Orion facility in the Gulf of Mexico since 2008, when Thunder Horse
will feature a combination of high transport and load capacity, came online. It will be the company’s fifth operated platform
in your a
lifting heights, and green technology. in the Gulf of Mexico and it will help extend the life of the su-
The vessel will be deployed for the construction of offshore per-giant Mad Dog oil field beyond 2050. •

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Constant efficiency.
Minimal downtime.
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1901OFF08-23.indd1 19
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AM
BRUCE BEAUBOUEF
• DRILLING & PRODUCTION HOUSTON

OFFSHORE OILFIELD SERVICES MARKET PROJECTED


TO IMPROVE IN 2019
Rystad Energy forecasts $210 billion expenditure globally on
offshore oilfield services next year, as 100 new projects po-
tentially go forward. This follows four consecutive years of
declining revenues for offshore services contractors.
“The uptick in new projects in 2017, 2018 and now 2019
will be enough to turn revenue growth positive to mid-single
digits as offshore capex is set to increase due to the recent
years of capital commitments,” said Audun Martinsen, head
of oilfield service research at Rystad Energy.
Next year’s new projects carry combined greenfield com- The Johan Sverdrup processing platform is now sailing to Norway
mitments of around $120 billion, Rystad claimed. onboard the Boskalis Vanguard. (Courtesy Equinor)
Despite the recent swings in the oil price, operators still
plan to spend more next year and move forward on project “Having built this as a complete topside gave us a unique
sanctioning, with more than 85% of projects on course for opportunity to test a lot of systems that we normally wouldn’t
sanction likely to generate returns above 10% even at current have been able to test prior to installation offshore,” said Jill
oil prices. Sale, project manager for the processing platform and respon-
This is because development costs have come down by 30% sible for the Johan Sverdrup project in South Korea.
since 2014. Unit prices in 2018 were at levels not seen by the “This has given us a better picture of the quality of the work
offshore market since 2006, the analyst added. undertaken and helps safeguard the plan towards start-up of
“Couple that with one of the most profitable years for E&P the field next year.”
in decades in 2018, and the recent production cut agreement The topsides is now sailing to Norway onboard the
by OPEC and Russia – offshore operators want to focus on heavy-transport vessel Boskalis Vanguard. Its initial destination
field development again,” Martinsen said. will be the Kværner yard on Stord, off western Norway, where
In terms of value for next year’s projects, 30% is in the Middle two pedestal cranes will be mounted, and where further prepa-
East, 25% in South America, 15% in both Africa and Asia, and rations will follow before the structure is lifted into position
the remainder in Europe and North America combined. in one single lift by the Pioneering Spirit.

QATAR PETROLEUM TO PARTNER


NUMBER OF OFFSHORE PROJECTS BY COMMITMENT YEAR WITH ENI OFF MEXICO
120
Qatar Petroleum will acquire 35% of Eni’s interest in Area 1
110 in the Bay of Campeche, pending approval from the Mexican
100 96 authorities.
94
80
Area 1 was awarded outright to Eni under a competitive
bid round in September 2015 and signing of the produc-
Number of projects

62
60 tion-sharing contract followed three months later. To date it
45
40
has drilled five successful wells in the concession, which is
estimated to hold in-place resources of 2.1 Bboe in the Amoca,
20 Miztón and Tecoalli fields.
0
Recently, Eni took a final investment decision to proceed
2016 2017 2018 2019 2020 with the $2-billion development, which will feature an initial
Source: Rystad Energy OFS Sanctioning Report - Oilfield Service Analytics early production phase. This is due to start up in mid-2019
through a wellhead platform on the Miztón field, with pro-
SVERDRUP PROCESS TOPSIDES HEADS TO NORWAY duction heading onshore through a 10-in. multiphase line
The topsides for the Johan Sverdrup processing platform in followed by treatment at an existing Pemex facility.
the Norwegian North Sea is setting sail from the Samsung Eni anticipates an early production plateau of 8,000 b/d;
Heavy Industries yard on Geoje Island, South Korea. full-field production will start in early 2021 through an FPSO
Aker Solutions was responsible for engineering and pro- with a treatment capacity of 90,000 b/d. Two more platforms
curement management for the topsides. According to Johan will be installed on the Amoca Tecoalli fields. Area 1 oil output
Sverdrup operator Equinor, since construction finished in will eventually total 90,000 b/d and 65 MMcf/d from 2021. •
May, there have been numerous tests to ensure the processing
facility is completed to the fullest extent possible prior to
installation next spring at the field location.

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1901OFF08-23.indd
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PM
BRUCE BEAUBOUEF
• OFFSHORE WIND ENERGY HOUSTON

LEASE SALE OFFSHORE MASSACHUSETTS YIELDS and members of the Massachusetts Renewable Energy Task
$405 MILLION IN WINNING BIDS Force have been great partners throughout this process. We
In mid-December, the US Department of Interior and the Bureau look forward to working with them and the lessees as we move
of Ocean Energy Management (BOEM) completed what it forward with next steps for developing offshore wind energy in
described as the nation’s eighth and highest grossing competitive a responsible manner.”
lease sale for renewable energy in federal waters. Before the lease is executed, the Department of Justice and
The lease sale offered about 390,000 acres offshore Massa- Federal Trade Commission will conduct an anti-competitiveness
chusetts for potential wind energy development and drew review of the auction, and the provisional winner will be required
competitive winning bids from three companies totaling about to pay the winning bid and provide financial assurance to BOEM.
$405 million. If fully developed, the areas could support approx- The lease will have a preliminary term of one year, during
imately 4.1 gigawatts of commercial wind generation, enough which the lessee may submit a site assessment plan (SAP) to
electricity to power nearly 1.5 million homes. BOEM for approval. The SAP will describe the facilities (e.g.,
meteorological towers or buoys) a lessee plans to install or
Provisional winner Lease area Acres Winning bid
deploy for the assessment of the wind resources and ocean
Equinor Wind US, LLC OCS-A 0520 128,811 $135,000,000.00
conditions of its commercial lease area.
Mayflower Wind Energy, LLC OCS-A 0521 127,388 $135,000,000.00
Following approval of an SAP, the lessee will then have four
Vineyard Wind, LLC OCS-A 0522 132,370 $135,000,000.00
and a half years to submit a construction and operations plan
The provisional winners of the lease sale are: (COP) to BOEM for approval. Once BOEM receives a COP, it
The following companies participated in the lease sale: Cobra will conduct an environmental review of the proposed project
Industrial Services, Inc.; East Wind, LLC; EC&R Development, and reasonable alternatives. Public input will be an important
LLC; EDF Renewables Development, Inc.; Equinor Wind US, part of BOEM’s review process. If BOEM approves the COP, the
LLC; Innogy US Renewable Projects, LLC; Mayflower Wind lessee will then have a term of 33 years to construct and operate
Energy, LLC; Northeast Wind Energy, LLC; PNE WIND USA, the project.
Inc.; Vineyard Wind, LLC; and wpd offshore Alpha, LLC. Before this lease sale, the highest grossing offshore wind
The three lease areas auctioned are located 19.8 nautical lease sale in the US was held in December 2016 for the lease
miles from Martha’s Vineyard, 16.7 nautical miles from Nan- area offshore New York. That lease sale received a winning bid
tucket, and 44.5 nautical miles from Block Island.  of over $42 million, according to BOEM.
“This auction will further the administration’s comprehensive After this auction, BOEM now has 15 active wind leases. The
effort to secure the nation’s energy future,” said BOEM Acting bureau added that these lease sales have generated more than
Director Cruickshank. “The Commonwealth of Massachusetts $473 million in winning bids for nearly 2 million acres in federal
waters.

NEW TECHNOLOGIES
A number of leading oil and gas service companies and man-
ufacturers are gearing up to serve the growing offshore wind
market. A brief survey of some of the now offerings is below.
Wind floater concept wins AIP. SBM Offshore has announced
that its wind floater design, including its mooring system and
featuring a commercially available offshore wind turbine, has
been granted an Approval in Principle (AIP) by classification
society American Bureau of Shipping (ABS).
Based on a TLP concept, SBM says that the wind floater has
been designed for operations across the full life cycle, including
in-place conditions, as well as for wet tow with the turbine
installed and mooring hook-up phase. The approved design has
been developed to a technology maturity level of a front-end
engineering design for all relevant extreme and fatigue load
cases, using detailed wind and metocean conditions for a site
offshore France.
SBM says that the complete design was developed in-house
and in collaboration with its partner, IFP Energies Nouvelles,
The December 2018 lease sale offshore Massachusetts offered using proprietary design tools and the detailed wind turbine
about 390,000 acres for potential wind energy development. model, including the controller.
(Courtesy BOEM) The AIP verifies that the floater is feasible for the intended

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BRUCE BEAUBOUEF
HOUSTON OFFSHORE WIND ENERGY •

onboard the Windea La Cour, a purpose-built SOV owned by


Bernhard Schulte Offshore. The vessel is fitted with other Wärt-
silä sensor solutions, including the RangeGuard Monopole,
which is said to be the first targetless local position reference
sensor based on radar technology.

NEW CONTRACTS
While oil and gas service companies and OEMs are gearing up
for the offshore wind market, developers are looking to offshore
oil and gas installation contractors to help advance their
projects.
Subsea 7 has announced the award of a contract to Seaway
Offshore Cables (SOC), an entity in Subsea 7’s Renewables and
Heavy Lifting Business Unit, for the Yunlin Offshore Wind Farm
Based on a TLP concept, SBM Offshore says that its wind floater
has been designed for operations across the full life cycle. project by YunNen Wind Power Co. for the supply and instal-
(Courtesy SBM Offshore) lation of the export and inner array grid cable system.
The Yunlin offshore wind farm is located approximately 8
application and, in principle, in compliance with the applicable km off the coast of Yunlin County within the Taiwan Strait on
requirements of the ABS Guide for Building and Classing Floating the west coast of Taiwan and comprises 80 wind turbine gen-
Offshore Wind Turbine Installations and with sound engineering erators each with a capacity of 8 megawatts. In addition to the
practices. submarine cable installation works, SOC will also provide the
SBM says that the independent review supports its confidence pre-installation of horizontal drilling conduits, submarine cable
in its wind floater’s performance, particularly related to its low route surveys, post lay trenching, termination and testing ser-
mass, its minimal seabed footprint and low motions at nacelle vices. Associated materials will be provided including the supply
level. of submarine composite cables and cable protection systems.
Wärtsilä launches SceneScan. This is described as the first Project engineering will commence immediately from SOC
laser sensor developed for offshore wind farm applications offices in Leer, Germany and Taipei, Taiwan. Offshore activities
where the need for installing fixed reflective targets is eliminated. are planned for execution in 2020.
The new technology has been designed to increase safety on- Elsewhere, Nexans has won a multi-million-euro contract
board service operation vessels (SOVs), since vessel positioning for Ørsted’s Borssele 1 and 2 wind farms off the Netherlands
sensors that rely on targets fixed to the structure are often coast. The contract for the 66-kilovolt (kV) submarine inter-array
unreliable because of poor placement, poor quality, and ob- cable with associated accessories is the first to be placed under
scurement by workers on the platform. The SceneScan has been a new five-year framework agreement recently signed by Nexans
designed and developed by Guidance Marine, which was ac- and Ørsted.
quired by Wärtsilä in 2017. According to Wärtsilä, the SceneScan The Netherlands plans to increase its use of renewable energy
Monopole’s software allows for the measurement of range and to represent 14% of its energy mix in 2020 and 16% in 2023.
bearing to the offshore wind turbine, independent of the use of Offshore wind energy is an important part of this transition,
targets and GPS. The technology is said to be highly applicable and a major milestone is expected to be reached in 2020 when
for China’s developing offshore wind market, as well as for North Ørsted brings its Borssele 1 and 2 wind farms online.
Sea wind farms. The first SceneScan Monopole was delivered Nexans is supplying a total length of between 170 km and
in summer 2018 for a Chinese SOV newbuild project carried 190 km of subsea cable rated at a maximum operating voltage
out by GE Power Conversion, a subsidiary of General Electric. of 72.5 kV to provide the inter-array connections between the
The system successfully underwent sea trials earlier this year turbines and the offshore substations.
Borssele 1 and 2 are located around 23 km off the Dutch
coast in 14 to 36 m of water. Together, they will have a total of
94 wind turbines generating 752 megawatt of power, which is
enough electricity to meet the needs of around one million
domestic households.
The array cables will be produced at the Nexans Germany
plant in Hanover for delivery in 2019. After they have been laid
in place on the seabed, Nexans Subsea and Land Systems will
Sea trials for the SceneScan system (a) were successfully carried complete connection to the turbine bases using in-house jointing
out onboard the Windea La Cour (b) earlier this year. (Copyright: expertise in 2020. The cable accessories will be supplied by
Bernhard Schulte) Nexans Euromold facility based in Erembodegem, Belgium. •

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• TOP OFFSHORE PROJECTS

Shell’s Kaikias achieves reduced


cycle time, lower costs
Deepwater project brought online a year ahead of schedule

BRUCE BEAUBOUEF, MANAGING EDITOR

SHELL HAS DEMONSTRATED what is possible in terms of


lower costs and reduced cycle times with its Kaikias project in
the deepwater Gulf of Mexico. In May, the company announced
that it had started production at the Kaikias project about one
year ahead of schedule. Cycle time from discovery to production
for Kaikias phase one was less than four years.
Discovered in August 2014, Kaikias is in about 4,575 ft (1,395
m) of water in the Mars-Ursa basin about 130 mi (210 km) off-
shore Louisiana. The Kaikias field is estimated to contain more
than 100 MMboe of recoverable resources. Shell is the operator
and has an 80% working interest. MOEX NA, a wholly owned sub-
sidiary of Mitsui Oil Exploration Co. Ltd., has the remaining 20%
working interest.
Shell says that Kaikias is a high-value opportunity in the deep-
water Gulf that is located in close proximity to existing Shell infra-
structure. The first-phase development sends production from four
wells to the Shell-operated (45%) Ursa hub, which is co-owned by Discovered in August 2014, Kaikias is in about 4,575 ft (1,395 m) of
BP (23%), ExxonMobil (16%), and ConocoPhillips (16%). From the water in the Mars-Ursa basin. (Images courtesy Shell)
Ursa hub, volumes ultimately flow into the Mars oil pipeline. Esti-
mated peak production is 40,000 boe/d. removed. Shell worked with its vendors and contractors to find
Shell will redevelop the existing exploration and appraisal wells ways of making its engineering and design concepts more efficient,
instead of drilling new production wells, which will help the com- and to look for new ways of reducing project costs. And reducing
pany achieve an approximate 50% reduction in the overall devel- cycle time to get the cash flow moving sooner has been a key goal
opment costs, while also facilitating the early commercialization throughout the process.
of the project. So it was with Kaikias, which involves a single flowline tieback
Since taking the investment decision in early 2017, Shell has to the Ursa TLP, located in Mississippi Canyon block 810, just six
lowered the forward-looking, break-even price to less than $30 miles away. “We’re using an existing facility to tie into, and we’re
per barrel of oil. using the existing process system on the Ursa TLP to further reduce
“We believe Kaikias is the most competitive subsea develop- capital costs on Kaikias,” said Rick Tallant, Asset Manager–Gulf of
ment in the Gulf of Mexico and a prime example of the deepwater Mexico East for Shell. “In the past, we may have wanted to build
opportunities we’re able to advance with our technical expertise a new processing train or make some other modifications. But
and capital discipline,” said Andy Brown, Upstream Director, Royal with this lean approach, we have been able to find a way to use
Dutch Shell. the existing facilities on Ursa, with some minor modifications, that
“In addition to accelerating production for Kaikias, we reduced allow us to bring the capital costs down even further.”
costs with a simplified well design and the incorporation of exist- By simplifying the design and using lessons learned from other
ing subsea and processing equipment.” projects, Shell has been able to reduce the total cost on Kaikias
The results at Kaikias are part of Shell’s efforts to restructure by nearly 50%. “We’re making use of assets that have already been
its deepwater business in the wake of the downturn. A key part of capitalized,” says Tallant. “If you look at both Mars and Ursa, pro-
that new approach has been to include what the company calls duction has been ongoing for years, and now there’s available
“competitive rescoping” – boiling down project designs to only capacity in those systems. There’s significant available weight,
the amount needed for safety requirements and minimum opera- space, and capacity at those facilities, because those fields have
tional specifications. Floating platforms system designs have sim- probably seen peak production. Kaikias is six miles away from
plified and made more efficient, or eliminated altogether. Other the Ursa platform. Using those assets is the most efficient way to
systems and components have been standardized, reduced, or produce those barrels. It just makes sense.”

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TOP OFFSHORE PROJECTS •

Reducing drilling and completion costs was a key


focus area. “When we looked at our well designs,
they were often quite complex in the past,” Tallant
said. “We’ve rescoped those to make sure that we’ve
looked at the drilling margins, and that we have
understood the safety concerns. No matter what we
do, we’re going to have a safe well. We’re not going to
do anything that is going to compromise safety. But,
we found that there are well designs that are more
efficient, and that we can drill these wells faster.”
The search for drilling efficiencies led Shell to
adopt a standardized well design. This enabled
the company to use economies of scale, and make
orders for multiple wells across the portfolio. “You
can have backups from each of the individual wells
The first phase of the Kaikias project will include four wells tied back using a single
to help each other, rather than buying two sets for flowline to the nearby Shell-operated Ursa production hub.
every single well,” Tallant noted.
The result has been significant operational efficiencies, greater
savings, and less downtime. “Honestly, it makes things run much
faster,” Tallant observed. “We find that if you standardize the well
and all its various components, the crew knows exactly how to
drill and complete each well. They’ve done it before with the same
type of well they’ve done previously.”
By standardizing its well design, Shell has been able to reduce
the amount of casing needed per well, which brings further sav-
ings. This can be done while still maintaining a safe well, Tallant
says. “Of course we want to drill a well safely, but we also want to
be more efficient, and shorten the duration of drilling.”
In fact, Shell completed the drilling and appraisal of Kaikias
ahead of schedule and under budget, allowing the company to
achieve more than 20% in cost savings in this key area. This achieve-
ment was reached despite the company drilling the longest well
ever drilled by Shell at 34,500 ft measured depth.
Shell has also worked with its vendors to standardize their sub-
Shell says that Kaikias is a high-value opportunity in the deepwater
sea offerings, and bring those costs down as well. A key part of this Gulf that is located in close proximity to existing Shell infrastructure.
was a systematic effort to standardize subsea trees. Shell worked
with TechnipFMC to move toward standardization of tree design
and components, and subsea flowline concepts. “We asked them: that in turn “has brought the break-even price down quite a bit,”
‘What kind of designs do we need? Do we really need dual flow- Tallant says. “Our drilling costs on Kaikias have come down prob-
lines, or can we get by with one?’,” Tallant noted. ably about 50% from what they would have been at the beginning
For a number of Shell’s upcoming deepwater projects, engi- of the down cycle,” Tallant observed, “and subsea costs are down
neers determined that field development could move forward with about 30% as well.”
only a single flowline. This has led to considerable capex savings. TechnipFMC says it worked with Shell during the front-end
Kaikias has been a good example of these structural re-engineer- planning and design for Kaikias phase one to engineer solutions
ing efforts, Tallant says. that would improve the overall cost and pace of development.
For example, Shell engineers decided to go with a single flow- Under the terms of the contract, TechnipFMC was responsible
line, rather than a dual flowline for Kaikias. “In the past, and with for the manufacturing, installation, and integration of proprietary
higher oil prices, I think we would have gone with a dual flowline subsea production systems and subsea riser, jumper and flowline
system,” Tallant observed. “Having a dual flowline is a nice luxury equipment that was designed to improve project economics by
– it gives you operational synergy and offers flexibility, but it over- optimizing field production and minimizing lead times.
capitalizes you upfront. In this case, we’re going with a single flow- “Kaikias is an example of a competitive and capital-efficient
line system, which has really reduced costs from the subsea side.” deepwater project using infrastructure already in place,” Brown
By taking a hard look at the three main components of Kaikias observed. “The team has done a great job [of reducing] the total
– the wells, the subsea system, and the tie-in – Shell has been able cost by around 50% by simplifying the design and using lessons
to optimize the design through the entire field development, and learned from previous subsea developments.” •

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• TOP OFFSHORE PROJECTS

The newly onstream Aasta


Hansteen spar platform.
(Courtesy Equinor/Roar
Lindefjeld and Bo B.
Randulff)

World’s largest spar platform opens


deepwater production offshore mid-Norway
Aasta Hansteen could serve as hub for stranded gas fields

JEREMY BECKMAN, EDITOR, EUROPE

AASTA HANSTEEN, which came onstream late last year is completions, and produced gas directed through a new offshore
Norway’s deepest offshore development to date, in nearly 1,300 pipeline north of the Arctic Circle to the existing reception
m (4,265 ft) of water. The location, 186 km (115 mi offshore) in terminal at Nyhmana in mid-Norway. This would also be the
the Norwegian North Sea, and 120 km (75 mi) northwest of the world’s largest spar platform to date, and the first with onboard
Norne FPSO, is one of the harshest for any Norwegian project storage for produced condensates. Norway’s parliament sanc-
to date in terms of waves and weather; during the pre-sanction tioned the development in 2013.
design phase, the area was also remote from offshore export
infrastructure. And there was uncertainty over the long-term FIELD HISTORY
production potential of gas/light oil reserves in the area. The initial development comprised three fields. In 1997, BP
For these and other reasons Equinor (then Statoil) and discovered Luva, since renamed Aasta Hansteen after the Nor-
its partners in license PL 218 opted for Norway’s first single wegian women’s rights campaigner. Nine years later, Equinor
point anchor reservoir (spar) production platform, with subsea became operator of the license by acquiring BP’s 25% interest

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TOP OFFSHORE PROJECTS •

and went on to drill the Snefrid South and Hakland discover-


LEFT: The Seven Arctic
ies. In 2015, the company also proved gas in three satellite pros- loading suction anchors and
pects, of which Snefrid North – 6 km (3.7 mi) west of Hansteen templates produced by Aker
– was included as a late addition to the development and which Solutions in Sandnessjøen
is due to come onstream in late 2019. Estimated recoverable for Aasta Hansteen and
Snefrid Nord. (Courtesy
volumes for the four fields are around 55.6 bcm of gas and 600 Aker Solutions)
MMcm of condensate.
A year prior to partner sanction, Technip (now TechnipFMC) BELOW: Lowering of one
won a front-end engineering and design (FEED) competition for subsea template into water
at installation. (Courtesy
the spar platform: Equinor had also evaluated a circular Sevan Aker Solutions)
FPSO but concluded that a spar would be superior in terms of
minimizing motions and that this would in turn reduce fatigue
on the risers. It subsequently awarded TechnipFMC the engi-
neering, procurement, construction and transportation con-
tract, in partnership with Hyundai Heavy Industries in Ulsan,
South Korea, for the 200-m (656-ft) tall, 50-m (164-ft) diameter,
46,000-metric ton (50,706-ton) hull. In addition, the contract plant in Sandnessjøen and
covered the mooring system and design of the steel catenary installed by EMAS AMC’s
risers, which were a first for Norway, and which were selected Boa C construction vessel
partly as a lower-cost alternative to flexible risers. at the seafloor locations
Equinor exclusively assigned Hyundai the EPC contract for in mid-2015. The template
the 21,000-t topsides comprising a conventional integrated structures weigh from 115-180 metric tons (127-198 tons) and
deck, living quarters and a flare, with gas production capacity the suction anchors from 100-115 metric tons (110-127 tons),
of 23 MMcm/d, and storage for up to 25,000 cu m (883,000 cu explained Severin Lindseth, project manager at the time for
ft) of condensate for subsequent offloading to shuttle tankers. Aker Solutions. “The templates are each supported by only one
CB&I (since merged with McDermott) undertook the topsides suction anchor and there are systems that facilitate separate
FEED and detailed engineering, the solution involving use of installation of the suction anchor and the template structure.
heating and separation for conventional gas dehydration; dew The templates also allow for guideline-less installation of the
point control; compression of the gas for export through the trees.” Momek manufactured the suction anchors for the tem-
pipeline to Nyhamna; and stabilization of the condensate. plates and for the platform’s mooring lines and SCRs. Under a
Hyundai subcontracted Dutch fabricator CKT projects in separate contract, awarded following another design competi-
Rotterdam to build the eight-story, 2,600-t, 108-bed living quar- tion, Aker Solutions’ plant in Moss, Norway manufactured one
ters, designed to withstand extreme weather conditions, and dynamic and three static umbilicals ranging in length from 4
which would later be transported to Ulsan by the Dockwise Van- to 7 km (2.5 to 4.3 mi).
guard vessel; and Kvaerner to manage and assist completion of Earlier this year, Equinor cited Aasta Hansteen as one of its
the platform. Among the other main topsides items, GE would ongoing projects where costs had come down due to collabo-
supply the gas turbines under a five-year frame agreement with rative efforts with the well equipment providers. One of Aker
Equinor, with Unasys responsible for mechanical completion Solutions’ contributions in this regard, Lindseth said, was the
and commissioning services. provision of an advanced deepwater Open Water workover
system.
SUBSEA SYSTEMS Subsea 7 won the NOK2.2-billion ($257-million) EPIC con-
Aasta Hansteen’s production will come from eight wells, with tract that covered supply and installation of 18 km (11.2 mi)
the semisub Transocean Spitsbergen making good progress on of infield flowlines, all featuring BuBi mechanically-lined pipe;
the campaign, according to a recent update by the Norwegian installation of the umbilicals and tie-ins of these and the flow-
Petroleum Directorate (NPD). Equinor awarded Aker Solutions lines; and installation of the four-off SCRs and associated SCR/
the NOK2-billion ($234-million) EPC contract for the subsea flowline anchors. The subsea network comprises two produc-
production system (SPS) in early 2013 following a FEED com- tion flowlines from the Luva template to the platform; single
petition with FMC. Aker Solutions’ manufacturing plant in production flowlines from both the Hakland and Snefrid Sør
Tranby, Norway, has delivered horizontal Xmas trees for the templates to the platform; three SCRs for the flowlines, and
wells, comprising four for Luva, two for Hakland, one for Sne- one export SCR to the export pipeline system.
frid Sør, and one spare. The package included 8-in. wet gas flow In addition, Subsea 7 was responsible for the rigid spools,
meters for the design production rates, due to the fact that the manufactured at its Vigra spoolbase, which would connect the
multiphase meter is unusually large. flowlines to the manifolds; and for transportation of the spar
In addition, the SPS contract covered supply of two four-slot to the field location following pre-commissioning at Kvaerner
and one single-slot subsea templates, all built at Aker Solutions’ Stord, and subsequent hookup of the mooring lines to the

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• TOP OFFSHORE PROJECTS

platform and SCR/umbilical pull-in/hang-off operations. For pipeline to England via the Sleipner field hub in the North Sea,
these combined programs the company deployed a total of with further export options from Sleipner through the exist-
six vessels, the Seven Oceans, Seven Viking, Havila Subsea, Nor- ing transportation network delivering Norwegian gas to con-
mand Oceanic, Skandi Acergy, and Skandi Skansen. Among the tinental Europe.
contractors assisting these various campaigns, Nautronix was
commissioned to supply a subsea positioning system for the PLATFORM TOW
installations, and BMT the rock dumping to stabilize both the Construction of the platform in Ulsan took 39 months to com-
templates and the infield lines. plete, and shipment to Norway followed in two stages. In April
2017, the cylindrical substructure was loaded onto the heavy
POLARLED transport vessel Dockwise Vanguard which proceeded to sail west
During planning for Aasta Hansteen, the partners were aware via the Cape of Good Hope, arriving 60 days later at Hoylandsbig
that capacity through the Åsgard Transport System – the sole in the county of Sunnhordland where the hull was floated off
established gas export trunkline in the Norwegian Sea – would the vessel and towed to the Klosterfjorden outside the island of
be operating at full capacity for a few more years. With other Stord, near Bergen. There it was upended from the vessel into
stranded gas discoveries in the a vertical position and made
area, there was general recog- ready for the mating with the
nition of the need for a second integrated deck, which arrived
major pipeline system. Norwe- onboard the Dockwise White
gian trunklines operator Gassco Marlin at the end of November
started the planning process, 2017 following float-off and tow-
with Equinor taking over in late ing from Ølensvåg. Mating took
2011. Following a final invest- around three days to complete,
ment decision, Equinor submit- with the assistance of various
ted a plan for installation and tugs, barges and an onsite team
operation of the Polarled pipe- of 150 personnel managing and
line in January 2013 which Nor- verifying alignments, measure-
way’s parliament approved five ments and ballasting.
months later. In April 2018, the 339-m
Danish contractor Ramboll (1,112-ft) tall, 70,000-metric ton
performed detailed design of (77,162-ton) platform under-
the 482-km (300-mi), 36-in., went an 11-day tow by five tugs
70-MMcm/d capacity pipeline, to the field location. At the shal-
which the company claimed lowest point en route the clear-
would be the world’s deepest ance beneath the keel was 14 m
water installation to date for a (46 ft), and 20 m (65.6 ft) up to
line of this diameter. Equinor the crossing over the high-volt-
also contracted the Marubeni age cable over Langenuen. On
Itichu/JFE consortium to sup- arrival it was connected to the
ply 325,000 t of linepipe, coated pre-installed polyester mooring
externally and internally by Indonesia’s Wasco and subsequently lines, manufactured by Lankhorst, with First Subsea supply-
shipped to a newly built base in mid-Norway for the application ing the mooring connectors. Kvaerner then began assisting
of concrete coating. Kongsberg manufactured associated sub- Equinor with offshore hookup and preparations for the start
sea structures including in-line tees and connection systems of production.
– six tie-in points were pre-installed to accommodate gas from ABB is responsible for the platform’s electrical, control and
other future Norwegian Sea field developments. telecommunication system, from delivery through commis-
Between March and September 2015, Allseas’ Solitaire laid sioning, automation of the plant start-up sequences and related
the entire pipeline from the field location to the terminal at services. Following start-up, the company will also provide sup-
Nyhamna receiving gas from the Ormen Lange field, and which port as required to the platform and to Equinor’s Operations
would undergo expansion for Aasta Hansteen under operator North organization in Harstad, which will supervise offshore
Shell’s management. On completion of the pipeline installation, activity. ABB Oil, Gas and Chemicals in Norway managed design
Equinor said expenditure on the system ended up NOK4.5 bil- and engineering, with Equinor requesting various features to
lion ($526 million) below budget at NOK6.5 billion ($760 mil- improve the ease of operating the plant during normal opera-
lion) as a result of various measures that allowed it to adjust tion and to automate the start-up sequences.
the capacity and price to the market’s needs. Aasta Hansteen’s One of ABB’s tasks was to make the process leading up to first
gas will join Ormen Lange’s in heading through the Langeled gas as efficient and fast as possible, reducing a sequence of over

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TOP OFFSHORE PROJECTS •

said to have saved around 40 days in the


commissioning phase through identifying
and improving 57 different aspects of the
start-up process, and this led to a corre-
sponding reduction in trouble-shooting
and corrective measures, ABB claimed,
of around 2,700 man-hours. Obstacles
that came to light included inter-depen-
dencies between the physical instrumen-
tation and control logic that would be
difficult or time-consuming to operate.
In addition, ABB provided a condition
monitoring system that can monitor over
100,000 maintenance conditions for more
than 4,000 equipment items, along with
Aasta Hansteen substructure upending. (Courtesy Equinor/Espen Rønnevik/ Roar Lindefjeld)
tools for alarm management and alarm
rationalization, and third-party system
integration of essential data traffic.

CONCLUSION
The NPD estimates investment costs
for the entire development at around
NOK37.5 billion ($4.38 billion), in line
with the scenarios forecast in the devel-
opment plan. At peak, expected shortly
after start-up, Aasta Hansteen will deliver
23 MMcm/d with the plateau figure set
to be sustained until 2023, including out-
put from Snefrid Nord. Tie-in points have
been installed at the platform to accom-
modate future developments in the area
after the field has come off plateau: these
could include new discoveries drilled by
Equinor close to Aasta Hansteen, and
the company’s 16-bcm Asterix field, 80
km (49.7 mi) west of Aasta Hansteen,
Spar platform tow from Stord to the field. (Courtesy Woldcam/Equinor) drilled in 2009 in 1,360 m (4,462 ft) water
depth. •

1,000 conventional manual interventions to the bare minimum.


For this the company applied ABB Ability, which it describes as “a
unified, cross-industry digital offering, extending from device to
edge to cloud, with devices systems, solutions, services and a plat-
form that allow clients to know and do more, better and together.”
The company deployed its ABB Ability System 800XA simula-
tor in the Professional version which allows the Equinor team to
operate and improve operations “in a pure virtual environment.”
The simulator’s control system is disconnected from the physical
process and is instead simulated by a high-accuracy mathemat-
ical dynamic process model that represents the physical process
of the plant. The model, integrated with the simulator, is said to
provide a realistic simulation environment.
According to ABB Oil, Gas and Chemicals Managing Director ABB Ability 800xA simulator saved an estimated 40 days in the
Per Erik Holsten, by automating much of the process the number commissioning phase by reducing manual interventions by 98%.
of manual interventions was limited to 20. The simulator is also (Courtesy ABB)

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• TOP OFFSHORE PROJECTS

The Shah Deniz Bravo production and risers platform (left)


bridge-linked to the quarters and utilities platform (right) offshore
Azerbaijan in the Caspian Sea. (All images courtesy BP)

Shah Deniz 2 marks starting point


for the Southern Gas Corridor
Local content plays major role

JESSICA STUMP, ASSISTANT EDITOR

THE BP-LED SHAH DENIZ consortium started up the Shah The Shah Deniz consortium is: BP, 28.8% - operator; TPAO,
Deniz Stage 2 project in the Azeri sector of the Caspian Sea on 19%; Petronas, 15.5%; AzSD, 10.0%; SGC Upstream, 6.7%; Lukoil,
June 30, 2018, including first commercial gas delivery to Turkey. 10%; and NICO, 10%.
The $28-billion project is the first subsea field development in At plateau, Shah Deniz 2 is expected to produce 16 bcm/yr
the Caspian Sea and the largest subsea infrastructure operated of gas. Together with output from the first phase of develop-
by BP worldwide. It is also the starting point for the Southern ment, total production from the Shah Deniz field will be up to
Gas Corridor series of pipelines that will for the first time deliver 26 bcm/yr of gas and up to 120,000 b/d of condensate.
natural gas from the Caspian Sea direct to European markets. Offshore, the Shah Deniz 2 project includes 26 subsea pro-
According to BP group chief executive Bob Dudley, “Shah duction wells in five clusters, 500 km (311 mi) of subsea pipe-
Deniz 2 is one of the biggest and most complex new energy lines and flowlines, and two new bridge-linked platforms. Gas is
projects anywhere in the world, comprising major offshore, transported onshore through an 85-km (53-mi) pipeline to the
onshore, and pipeline developments. BP and our partners have Sangachal terminal near Baku, which underwent a major expan-
safely and successfully delivered this multi-dimensional project sion to accommodate the increased gas output. The project also
as designed, on time, and on budget. includes the South Caucasus Pipeline Expansion that called for
“Together with the Southern Gas Corridor pipeline system, 428 km (266 mi) of new pipeline in Azerbaijan and 59 km (37 mi)
Shah Deniz 2 will deliver significant new energy supplies to of new pipeline and two new compressor stations in Georgia.
Europe, further diversifying its sources of energy and provid- Discovered in 1999, Shah Deniz is one of the largest gas/con-
ing new supplies of natural gas which will be essential in the densate fields in the world. It is located on the deepwater shelf
energy transition.” of the Caspian Sea, 70 km (43 mi) southeast of Baku, in water

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TOP OFFSHORE PROJECTS •

depths ranging from 50 to 500 m (164 to 1,640 ft). The field is Tofiq Ismayilov, and the derrick barge Azerbaijan.
estimated to hold about 1 tcm of gas and 2 Bbbl of condensate. All the fabrication and construction work was conducted at
It covers about 860 sq km (332 sq mi), roughly the same size the Heydar Aliyev Baku Deepwater Jackets Factory.
and shape as Manhattan Island. Shah Deniz 1, the first phase The production and risers platform (SDB-PR) jacket, which
of development, began production in 2006. It currently supplies weighs 13,150 metric tons and stands 105 m (344 ft) high, was
gas to Azerbaijan, Georgia, and Turkey. installed in a water depth of 94 m (308 ft) in late September
The Shah Deniz consortium took the final investment deci- 2016. It contains 12 production risers, three export risers, and a
sion for Shah Deniz 2 in December 2013. dedicated monoethylene glycol import riser. The quarters and
Local content played a major role in this full field development utilities platform (SDB-QU) jacket, which weighs about 12,084
project. According to BP, at peak the Shah Deniz 2 development metric tons and stands 105 m (344 ft) high, was installed in a
supported more than 30,000 jobs in Azerbaijan and Georgia and water depth of 95 m (312 ft) in mid-2017. It contains 31 J Tubes,
in total included more than 180 million hours of work. seven utility caissons, and three J tube caissons.
The consortium consisting of BOS Shelf LLC, Saipem Con- The AMEC-Tekfen-Azfen consortium won a $974-million
tracting Netherlands B.V, and Star Gulf FZCO won the $750-mil- contract for the fabrication, load out and offshore hook-up and
lion contract for the fabrication of the platform jackets, pin piles, commissioning of the topsides units of the SDB-PR and SDB-QU.
and subsea structures. The scope of work included construc- Both topsides units were built at the Azfen fabrication yard in
tion of two eight-legged single batter jackets and the fabrication Bibi-Heybat near Baku.
of 2,300 subsea structures with a total weight of 30,000 metric The QU topsides unit weighs about 12,400 metric tons and is
tons. The subsea fabrication scope included eight subsea iso- 100 m (328 ft) long by 60 m (197 ft) wide. It contains 100-person
lation valve structures, 10 flowline termination assemblies, 80 living quarters (supplied by Apply Emtunga), four main power
walking anchors, 100 subsea tie-in piping spools, 100 pipeline generators totaling 60 MW, 10 direct electrical heating, mod-
crossing supports, 1,000 concrete mattresses and 1,000 metric ules, and a range of subsea production equipment. It was com-
tons of current transfer zone foundations. pleted ahead of schedule and was installed offshore in June 2017.
In addition, the BOS Shelf, Saipem, Star Gulf consortium The PR platform topsides unit weighs about 15,800 metric
received a $1.8-billion contract for the offshore transport and tons and is 100 m (328 ft) long by 60 m (197 ft) wide. It con-
installation of both jackets and topside units, subsea produc- tains a 133-m (436-ft) long flare boom, 10 flowline reception
tion systems, and subsea structures. It also included the lay- facilities, five production separators, two flash gas compres-
ing of more than 360 km (224 mi) of subsea pipelines, diving sors, and three production export flowlines. The PR topsides
support services, and the upgrade of three installation vessels was also completed ahead of schedule and was installed off-
– the pipelay barge Israfil Huseynov, the diving support vessel shore in September 2017.

The Khankendi was specifically


designed and built to install
the biggest subsea production
system in the Caspian Sea as part
of the Shah Deniz Stage 2 project.

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• TOP OFFSHORE PROJECTS

strengthened moonpool. The Khankendi


is said to be able to carry out complex
activities without the need for anchors.
It has a maximum capacity of 175 peo-
ple on board.
The semisubmersibles Heydar Aliyev
and Istiglal are drilling the 26 wells.

SOUTHERN GAS CORRIDOR


Shah Deniz 2 is the starting point for the
Southern Gas Corridor series of pipe-
lines that will deliver natural gas from the
Caspian Sea direct to European markets
from 2020. When complete, the South-
ern Gas Corridor will in total comprise
3,500 km (2,175 mi) of pipelines, including
the South Caucasus Pipeline Expansion
(SCPX) across Azerbaijan and Georgia,
the Trans-Anatolian Natural Gas Pipe-
The Southern Gas Corridor will in total comprise 3,500 km (2,175 mi) of pipelines.
line (TANAP) across Turkey, and the
Trans-Adriatic Pipeline (TAP) across
Greece, Albania, and into Italy.
Baku Shipyard designed and built the Khankendi, a $378-million flagship subsea SCPX consists of 428 km (266 mi) of
construction vessel. It was specifically designed and built to install the biggest sub- 48-in. pipeline through Azerbaijan and
sea production system in the Caspian Sea as part of the Shah Deniz Stage 2 project. 59 km (37 mi) of new 48-in. pipeline and
Launched in 2017, the vessel will perform subsea installation and construction work two new compressor stations in Georgia.
over the next 11 years at the field. The vessel is 155 m (509 ft) in length and 32 m (105 TANAP consists of 1,340 km (833 mi) of
ft) in width with 2,000 sq m (21,528 sq ft) of deck space. It has a total weight of 17,600 56-in. pipeline, 34 km (21 mi) of 36-in.
metric tons, a carrying capacity of 5,000 metric tons at 6.5 m (21 ft) draft and two pipeline, and 476 km (296 mi) of 48-in.
engine rooms with 6 x 4.4-MW and 2 x 3.2-MW generators. It is equipped with dynamic pipeline across Turkey. TAP consists of
positioning to allow working in 3.5 m (11 ft) significant wave height, a 900-metric ton 878 km (546 mi) of 48-in. pipeline across
main crane capable of placing 750-metric ton subsea structures down to 600 m (1,968 Greece, Albania, and into Italy. •
ft) below sea level, an 18-man two-bell diving system, two work-class ROVs and a

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PM

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OFFSHORE OUTLOOK •

Offshore is back – and shallow water


is no exception
Jackup market expected to recover in 2019

ODDMUND FØRE, RYSTAD ENERGY

THE OFFSHORE industry weathered the Hail shallow-water assets under the Hail and Ghasha Sour Gas project could generate
storm of low oil prices by cutting costs and over $10 billion in capex. However, their current breakeven price of over $60/bbl merits
sanctioning fit-for-purpose scopes. The more caution as they head to a sanctioning decision mid-2019.
industry also reduced unit price reductions, In the new wave of offshore sanctioning, shelf developments are expected to strengthen
sought efficiency gains, and reduced the their position in the offshore market. During the period prior to 2014, greenfield commit-
scope of projects to push down breakeven ments for shelf developments made up approximately 41% of total greenfield investments,
costs for both deep and shallow water fields but this is likely to grow to 44% in the period from 2017 to 2021. Similarly, the new offshore
by over $30/bbl from their 2013-14 lev- investment cycle is set to be more dependent on commitments from smaller operators,
els. Now with the worst of the downturn which are expected to take up 46% of total greenfield commitments from 2017 to 2021
behind, the industry appears ready to start compared to 32% prior to 2014. The change in dynamics can be related to the trend seen
a new wave of project sanctioning. during the downturn, where big oil companies divested their offshore exposure in favor
In fact, greenfield project commit- of shale, illustrating the tremendous competition for investment dollars that confronted
ments have risen every year since 2016. the offshore market by the shale industry.
The year 2018, for its part, is likely to close After the oil price started to recover back in 2016, investments in the short-cycled shale
with over $85 billion of greenfield project industry gained momentum very quickly. In contrast, offshore greenfield investments
commitments. While that represents a 25% failed to show growth reflective of the uptick in the oil price. The greenfield commitments
increase over 2017’s commitment levels, materializing in the offshore space during this period was skewed toward further devel-
it could have been even higher. Sanctions opment of existing infrastructure, where more than 40% of all greenfield commitments
between the USA and Iran, contract delays in 2016 were related to subsea tiebacks, showing that the short-cycle focus was also pres-
and operators deferring investment deci- ent in the offshore market.
sions led to a delay of over $20 billion of Going forward, it is not only the amount of greenfield investments that speaks for
potential commitments. improved market conditions in the offshore space. Operational expenditures are also set
Over the next three years, the industry to increase by 10% per annum toward 2021, driven primarily by the large demand for oil-
looks poised to sanction at least $100 billion field services in shallow waters, which are set to grow from approximately $100 billion in
of greenfield projects per year (on average).
These projects have breakeven prices below
$60/bbl and are expected to reach a final F1: GREENFIELD CAPEX IS DRIVING THE UPCOMING RECOVERY
investment decision by the end of 2021. In
Offshore greenfield capex by commitment year
the near-term, all eyes will be on Qatargas’s
250
North Field Expansion mega-project. This
202
three-train steel platform development will
require over $26 billion of capex to reach a 200
mid-2024 start-up of the first train. While 170
US $, billions

an investment decision is expected by year- 150 146 140


133
end, Qatargas has already started to engage
potential contractors. In addition, Exxon-
100 96
Mobil’s work in Mozambique and Guyana 79 84
could result in over $15 billion in sanction- 55
67
ing alone next year. 50 33
However, these will not be the only off-
shore projects garnering attention. An addi-
0
tional $25 billion of yearly commitments is 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Average
being held hostage by unattractive $60+ per 2019-21

barrel breakeven prices. The Ghasha and Source: Rystad Energy DCube

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• OFFSHORE OUTLOOK

2018 to $130 billion on 2021. The Middle East, Western Europe and North America are tendering activity is improving and rigs are
driving this growth. being reactivated – all indications that the
This is very good news for drillers waiting for utilization and rig rates to bounce back market is in the midst of re-setting itself.
up to sustainable levels. After some tough years in the wake of a market collapse, the tide Rig rates for the US Gulf of Mexico have
has turned and the market is seeing substantial improvements in the rig market with the been on the rise for the past two years. In
shallow water space no exception. Several key markets have started to see a consider- the same period, the number of rigs on
able uptick in utilization this year, and some are expected to be close to sold out in 2019. contract doubled in order to keep up with
While the Middle East is still the main driver of jackup demand, the regional markets in the growing demand on the shelf. Look-
West Africa, Southeast Asia, the North Sea and the US Gulf of Mexico have all seen posi- ing ahead there is reason to believe that
tive development in utilization levels in 2018, and some of these markets are already reg- the drillers can look forward to a further
istering higher day rates. Furthermore, we know that contract lead times are increasing, increase in utilization and rig rates as
demand is picking up due to increased
F2: OFFSHORE GREENFIELD COMMITMENTS 2011-2013 VS 2017-2021 investments driven largely by brownfield
activities. The reform of the fiscal regime
2011-13 Customer market share 2017-21 Customer market share in the US Gulf should also be favorable for
Small Small the shallow waters in the region and we
E&P E&P
have already seen growing numbers in lease
Large Large
E&P E&P rounds over the past couple of years.
NOC 32% NOC The Norwegian continental shelf (NCS)
Other 46% is another market expected to have very
Other few rigs available to take on additional
Majors/ Majors/ work due to the country’s stringent spec
IOCs IOCs
requirements and the need for an Acknowl-
edgement of Compliance. As such the NCS
market is already sold out when looking
2011-13 Waterdepth market share 2017-21 Waterdepth market share into 2019. The tightening of the NCS market
UDW UDW has been visible through increasing rates
1500m+ 1500m+ lately. For example, the Maersk Intrepid
19% 21%
Shelf Shelf signing off at $266,000 with Equinor. This
<125m <125m
41% 44% is double the rates signed for drillships so
far in 2018. The CJ70 design has typically
40% 35% been earning a premium in the region.
MW MW West Africa is also a region where we
125-1500m 125-1500m expect a substantial uptick in demand
Source: Rystad Energy DCube going forward, and we have already seen
this starting to materialize in the number
of rigs on contract. Accordingly, we expect
F3: OFFSHORE OPERATIONAL EXPENDITURE SET TO utilization to increase on the assumption
INCREASE 10% P.A. TOWARDS 2021 of no further retirements of the fleet. We
therefore believe that there will be a need
250
Shelf (to 125 m) for new capacity as well as a call for new-
Deep water (125-1,500 m) builds into the 2020s.
Ultra deep water (1,500 + m)
200 On the whole, we expect the jackup
market to recover next year with a steady
stream of work from greenfield and brown-
Thousands

150 CAGR
+9%
fields projects and decommissioning work.
With utilization and rig rates on the mend
100 for several markets around the world,
there is some potential uplift if the indus-
CAGR try retires more units. If this is done, then
50 +8%
we would expect a fundamental increase
CAGR in rig rates thereby unlocking some of the
+19%
0 capacity sitting in Chinese shipyards which
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
would be needed in order to meet the grow-
Source: Rystad Energy DCube ing demand we see in the future. •

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OFFSHORE OUTLOOK •

The upturn is now


Recent consolidation set to pay off as market fundamentals improve

JAMES WEST, EVERCORE ISI

WHAT A WILD RIDE it has been. We McDermott. In 2015, Schlumberger agreed to buy Cameron; and this was fol-
delivered a speech in 2014 when we lowed in 2016 with Technip and FMC Technologies agreeing to merge. Thus two
first joined Evercore ISI at a deepwater offshore/subsea powerhouses were created. These two companies are pioneering
conference in London. In our speech new ways of collaborating and standardization; they are evolving the industry.
we discussed the challenges facing Drilling adjustments. Faced with collapsing demand, falling day rates and heavy
the deepwater and offshore markets, debt burdens, the 2015-2017 period was extremely difficult for the offshore drill-
including collapsing returns for the ers. Many went bankrupt, many issued equity and were forced to issue secured
majors (even before the oil price drop); debt, and difficult revolver negotiations ensued. Next, the companies slashed
persistent cost overruns; a significant and burned costs. They found that reductions in cost structures of 30-50% were
lengthening of time from discovery to
first oil; and the threat of relatively new F1: GLOBAL FLOATER SUPPLY
short cycle shale. In our view, major
industry changes were needed – col- 340
Newbuilds
laboration, cooperation, and standard- Retirements
320
ization to name a few.
And customers have awoken to the 300
idea of increased collaboration. The oil
US $, billions

companies now understand the need 280


for change. These changes include
260
the need to drive better collaboration
in order to improve project planning 240
and the contract negotiation process;
partnering to improve outcomes and 220
speed up the timeline to bring R&D
to market; leveraging digitalization to 200
2009 2010 2011 2012 2013 2014
enable smarter decision making; and
changing employees’ mindsets to work Source: IHS-Petrodata, Evercore ISI Research

differently.
This down cycle has witnessed an F2: FLOATER SUPPLY, DEMAND & UTILIZATION
unprecedented number of changes to EVRISI estimates 100
the offshore industry including. These
300
are detailed below. 80
Subsea first. The subsea and marine 250
Percent utilization

construction companies moved first,


Number of units

initially with joint ventures (OneSub- 200 60


sea was a JV with Schlumberger and
150
Cameron; Forsys Subsea was a JV 40
with Technip and FMC Technologies) 100
and then alliance agreements (Helix 20
joined SLB and OneSubsea to create 50
the Subsea Services Alliance, and sep-
arately a few months later Subsea 7 0 0
1985 1990 1995 2000 2005 2010 2015 2020E
and SLB announced a global alliance)
Excess supply Demand
while at the same time, Baker Hughes
Utilization Effective utilization
teamed up with Aker (now with Vetco
Source: IHS-Petrodata, Everore ISI Research
as part of the new BHGE); then BHGE
subsequently formed an alliance with

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• OFFSHORE OUTLOOK

plausible. New ways of working evolved; rig equipment suppliers took on risk; 40+ in 2018). Underpinning our bull-
performance-based contracts permeated the industry; and the adoption of big ish thesis for the offshore market is
data analytics and automation unfolded. the fact that the necessary supply of
Contractor M&A. As the industry begins to climb out of the most horrific down- global oil cannot come solely from the
turn since the 1980s, an M&A cycle has begun in earnest. Transocean bought Permian basin. For years, IOCs have
Songa and Ocean Rig. Ensco grabbed Atwood and is now merging with Rowan. enacted capital discipline while explo-
Noble is picking off assets in the shipyards. Borr Drilling, a scrappy upstart, has ration activities (and thus, new reserve
systemically scooped up jackup rigs at the market bottom. The great consolida- discoveries) and infrastructure have
tion wave is here and it could not come at a better time. Day rates have already received scant attention. While the
moved substantially higher for harsh-environment floaters, and day rates are timing remains uncertain, we remain
jumping 30-40% off the bottom for high-specification jackups. We believe that steadfast in the belief that eventually,
the move for high-specification drillships is next. the necessity of supplying the incre-
Despite the recent pullback in oil prices, the offshore rig market outlook remains mental barrel of oil to support global
encouraging with demand still healthy at $60 Brent. Notably rig contractors are demand growth will have to come from
continuing to proactively manage supply, with three additional newbuild floaters outside of the North American land
and 12 newbuild jackups deferred over the past month. The industry is on track market. Reserve replacements are at
to take delivery of only one to four newbuild floaters and 16 to 21 newbuild jack- a 20-year low; the industry is replac-
ups this year (with three and five respective newbuilds scheduled between now ing only one-third of offshore produc-
and year-end). This is a far cry from 22 floater and 64 jackup newbuilds sched- tion; and delays in project FIDs over the
uled at the start of the year, which combined with ongoing rig attrition (17 float- past four years have removed 6 Mb/d
ers and 35 jackups YTD) implies a net reduction of at least 14 jackups (2.6%) and of 2025 supply.
13 floaters (5%) for the year. Overall, global floater supply has contracted by 83 We believe that deepwater develop-
units or 25% from the October 2014 peak with retirements exceeding newbuild ment will play a sizeable role in global
additions for four straight years, while the global jackup supply is down 16 units supply and while well breakevens have
or 3% from the January 2018 peak. come down, the industry remains laser
There is now a visible path to higher day rates. Reflecting our demand forecasts focused on making deepwater devel-
and assumptions for incremental retirements and modest newbuild additions, we opment competitive with shale. The
see a visible path to effective utilization improving to 82% for jackups and 74% subsea and marine construction com-
for floaters in 2019 and 86% for jackups and 82% for floaters in 2020. While there panies want to be in the forefront to
is no firm timeline for when day rates will begin to move up, pricing power tends drive fundamental changes around how
to swing to the contractor when utilization gets back to the 80s. deepwater discoveries are developed,
There are other positive trends: projects seem to be moving toward FID; the and how interactions with customers
need to replace reserves is becoming a major concern; and oil prices remain sup- take place. They want to leverage their
portive. Offshore FIDs are growing (31 projects sanctioned in 2016 compared to portfolios to lower operators’ capex and
opex requirements, and make better
use of technology to unlock data and
F3: JACKUP SUPPLY, DEMAND & UTILIZATION better enable decision makers. They
also want to leverage flexible partner-
EVRISI estimates 100 ships and commercial models, and
500 standardize equipment to help drive
80 lower total cost of ownership. •
400
Percent utilization
Number of units

60
300

40
200

100 20

0 0
1985 1990 1995 2000 2005 2010 2015 2020E

Excess supply Demand


Utilization Effective utilization
Source: IHS-Petrodata, Everore ISI Research

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OFFSHORE OUTLOOK •

Floating production market


outlook strengthens
Brazil, West Africa rank as top growth areas

DAVID BOGGS, ENERGY MARITIME ASSOCIATES PTE LTD.

THE FLOATING production market out- F1: HOW CONFIDENT ARE YOU ABOUT THE BUSINESS OUTLOOK
look continues to strengthen, making this FOR YOUR COMPANY IN THE COMING 12 MONTHS?
the third year in a row that more than 50%
of survey respondents expressed positive 1%
6% 4% 10%
sentiment (somewhat confident to highly 23% 15%
confident), according to EMA’s annual 14%
Global Floating Production Industry Sur-
vey. The percentage of respondents who are
highly confident rose from 10% last year to 13%
23% this year. The number of respondents
expressing somewhat pessimistic and
58%
highly pessimistic outlooks dropped from 56%
19% to 7%. Interestingly, while the share of
pessimistic outlooks decreased, and the Highly confident - we will achieive or exceed our revenue and production
targets; likely to out perform 2018
share of high optimism increased, the pro-
Somewhat confident - there is a 50-70% chance we will achieve our revenue
portion of those cautiously optimistic and and production targets
neutral remained almost unchanged. This Neither confident nor pessimistic
suggests that while strong oil prices have
improved confidence, the vast majority of Somewhat pessimistic - there is a 50-70% chance we won’t achieve our
revenue and production targets
respondents see gradual improvements Highly pessimistic - most likely won’t achieve targets, may even under perform
with about a quarter expecting strong compared to 2018
growth. A few key quotes are highlighted Source: EMA, Global Floating Production Industry Survey
below:
“We have factored a very slow rate of the FPS market is not out of the woods yet. Nineteen percent still think it will take another
recovery into our business plans - so we 2+ years for the market to improve.
expect a limited uptake in our offshore sec-
tor in the next 12 months…” – International IMPACT OF THE DOWN CYCLE
Classification Society Two years after the worst period in the FPS industry, the survey asked how the industry
Expectations for the floating production has changed. The survey asked respondents whether the cost savings and efficiencies
market recovery proceeded in line with achieved during the downturn will be sustainable and make a lasting change on how the
last year’s results (with a shift by one year). FPS industry operates. The largest proportion, 40%, felt that less than a quarter of the
Almost two-thirds of respondents believe savings would be sustainable. Twenty-seven percent of respondents believe a significant
the offshore industry will recover in one portion (25-50%) will be sustained, while 29% of respondents are optimistic that a 50%+
year or less. Furthermore, 14% of respon- of cost savings will continue in the long run.
dents now believe that the current pace Most respondents believe that while there may be some long-term savings, many costs
of activity has recovered to pre-oil price will increase as activity picks up. A few key quotes are highlighted below:
crash levels. “As far as we can see as a supplier, a good chunk of the current cost savings are related
“We believe that the bottom of the mar- to squeezing the supplier in price without simplifying the requirements.” – Major Equip-
ket was realized in mid-2018.” – Leading ment Supplier
Mooring Contractor “I foresee the contributions of technology and project execution strategy as sustainable
“The FPSO sector has just passed its bot- going forward.” – Strategic Oil & Gas Consultant
tom ... and is just about to start a slow recov- “If the oil price spikes … the industry will be critically short on capacity and experi-
ery.” – International Classification Society enced personnel. In that case all the ‘savings’ will be thrown out the window. If the price
However, some respondents still believe stays stable, the cost savings and processes will continue unchanged.” – Project Developer

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• OFFSHORE OUTLOOK

F2: WHAT PERCENTAGE OF THE COST SAVINGS ACHIEVED DURING replace drilling and subsea as the second and
THE DOWNTURN ARE FUNDAMENTAL AND WILL BE SUSTAINED third ranked potential bottlenecks. This new
GOING FORWARD? ranking reflects the current stage of recovery
as a number of projects are now in the early
Less than 25% 40%
development stages where engineering and
management are critical. Fabrication yards
25-50% 27%
moved up to fourth position from eighth last
year as orders resume at experienced yards,
More than 50% 19%
all of which have downsized.
“The main capacity constraints will be
Almost all
10%
personnel driven rather than materials,
(fundamental cost savings)
hardware or asset driven. A lot of good peo-
Almost none ple have left the industry and they are not
(not fundamental 4%
cost savings) being replaced.” – Independent Oil Company
Drilling and subsea dropped down to
Source: EMA, Global Floating Production Industry Survey
the eight and tenth positions reflecting sub-
GREATEST GROWTH OBSTACLES stantial availability in 2019-2020. These two
For the fifth year in a row, the price of oil was identified as the greatest obstacle to offshore industries have undergone significant con-
project growth. Most respondents are concerned with the volatility in oil prices rather than solidation and although activity has picked
the overall level. However, other concerns are shifting in priority. This year, access to finance up, there is still plenty of uncommitted
rose from third position to second with political issues moving up to third. This reflects capacity in the near term.
overall political and trade instability and new leadership in key markets such as Brazil and
Mexico. Macroeconomic concerns over risk naturally lead to tighter financing as investors MOST ATTRACTIVE GROWTH
and banks remain cautious. Environmental regulations moved from last place up the sixth, REGIONS
reflecting a larger impact in design, operations, and decommissioning. Costs remain low on Brazil and West Africa ranked as the top two
the list of concerns with drilling and subsea costs in the last positions this year. growth regions again this year, as they have
been since the beginning of the FPS Mar-
F3: WHAT ARE THE LARGEST OBSTACLES FOR AWARD OF NEW ket Sentiments Survey. Brazil improved its
OFFSHORE PREJECTS IN THE NEXT 12 - 24 MONTHS? standing as Petrobras has resumed ordering
FPSOs and other operators are progressing
new developments.
Price of oil 24%
The biggest changes this year are the
Access to finance 14%
attractiveness of the countries after the top
two. South America (ex-Brazil) jumped from
Political issues 13% ninth place to fourth place this year, driven
by the opportunities in Guyana as well as
More attractive investment 11%
opportunities (e.g. shale oil/gas) other frontier regions. Respondents are opti-
mistic about the Gulf of Mexico, moving
Price of natural gas 8%
up one spot to third. The US leaped up to
Environmental regulations 6%
fifth position buoyed by recent deepwater
discoveries such as Whale and Ballymore.
FPS costs 5%
TECHNOLOGY GAME CHANGERS
Technical challenges (e.g. water
5% The survey asked which type of technology
depth, high temp/high pressure)
will have the largest impact on the offshore
Reservoir uncertainty 5%
industry. The results were unmanned pro-
Subsea costs 4% duction facilities (UPF) and long distance
subsea tiebacks as a close first and second.
Drilling costs 4% A number of the reasons may account
for UPF’s rise in popularity—the high cost
Source: EMA, Global Floating Production Industry Survey of personnel as a portion of operating costs,
re-thinking current practices to develop
POTENTIAL BOTTLENECKS cost-effective solutions, and the increas-
For the third year in a row, most respondents do not see any capacity constraints in the ing application of digital solutions. While
next 1-2 years. However, this year FEED engineering and project management moved up to unmanned fixed facilities are common, the

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OFFSHORE OUTLOOK •

F4: IN WHICH SPECIFIC SECTORS DO YOU FORESEE CONSTRAINTS IN


THE COMING 12-24 MONTHS? technology has not yet been transferred to float-
ers. Even if a completely unmanned facility is not
No capacity constraints 14%
expected realized, reductions in personnel offshore would
result in lower operating costs.
FEED engineering 12%
Longer distance subsea tiebacks could enable
Project management 11% development of marginal fields, with shorter pay-
back while increasing the utilization of existing
Fabrication yards 11% facilities. Tiebacks certainly will extend the life
of currently installed production units, while the
Operations management 7% impact of future requirements is yet to be seen.
Some stand-alone FPS developments could be
Offshore installation 7%
replaced by tiebacks, while an FPS hub could
Shipyards 7% be made economic by tieback of multiple fields.
FLNGs dropped from first to fourth place as
Drilling 6% financing troubles have delayed sanction of new
Gas processing FLNG projects.
equipment 6%

Subsea
FIVE YEAR FORECAST
5%
The results of this survey are taken into account
Oil processing when compiling EMA’s outlook for floating pro-
4%
equipment
duction orders. In the base case scenario, EMA
Support service (class, 4%
insurance, legal, etc.)
expects 127 awards for FPS units worth just under
Power generation
$100 billion in the next five years. This year, the
3%
equipment firm has increased the projected number of FPSO
Other
awards by 9%, as investment returns to deepwa-
2%
ter projects. FPSOs will account for 40% of the
Mooring 1% orders and 75% of the capex. In terms of spend-
ing, Brazil will remain the largest market by far,
Risers 1% followed by Africa and the US Gulf of Mexico.
Orders are expected to resume for Australian
Source: EMA, Global Floating Production Industry Survey developments toward the back end of the forecast
F5: WHAT REGIONS OR COUNTRIES WILL PRESENT THE LARGEST GROWTH OPPORTUNITIES
OVER THE NEXT 5-10 YEARS?
18%

13%

11%

9% 9%

6% 6%
5% 5%
4% 4%
3% 3%
2% 2%

Brazil West GOM- South GOM- Southeast Australia/ East China Middle North Sea- South North Sea- Canada Med
Africa Mexico America US Asia New Africa East UK Asia Norway
(ex Brazil) Zealand
Source: EMA, Global Floating Production Industry Survey

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• OFFSHORE OUTLOOK

F6: FORECAST OF TOTAL CAPEX OF ALL FPS TYPES BY REGION ($1,M)

Based on Middle Case 2019-23 forecast

Brazil FPSO 28,400

Africa FLNG FPSO 17,500

GOM-USA FLNG Semi 10,000

SEA FPSO 9,890

Australia FPSO 7,700

South America FPSO 7,100


Northern
Europe
FPSO 6,055 FSO

SW Asia/ Spar
FPSO 3,955
Mid-East TLP

GOM-Mexico FPSO 3,455 Semi


FPSO
China 1,300 FSRU
FLNG
Mediterranean 640

0K 2K 4K 6K 8K 10K 12K 14K 16K 18K 20K 22K 24K 26K 28K 30K
Capex ($,m)
Source: EMA

period. South America (other than Brazil) will see $7 billion of capital
spent for FPSOs in frontier areas such as Guyana.

SUMMARY
The sentiment for the global FPS industry has continued to improve
since 4Q 2016. Awards have returned to levels last seen in 2013-2014,
prior to the oil price crash, and are projected to remain steady. How-
ever, certain sub-sectors and specialist contractors are busy, while
most continue to look for additional work. Development costs remain
low, fueled by excess drilling and subsea capacity, but offshore project
sanctions continue to be delayed as operators cherry-pick the best
opportunities in their global portfolios. Activity levels are expected
to increase, but at a measured pace as operators keep a close watch
on costs and spending.

ABOUT THE SURVEY


EMA’s Global Floating Production Industry Survey, now in its sixth
year, gauges the current market sentiment as well as where the
industry is heading in the future. This year EMA partnered with
Offshore magazine and the survey had a record response rate from
all areas of the industry and from all parts of the globe. The respon-
dents come from a mix of oil companies, engineering firms, finan-
cial institutions, equipment providers, construction yards, and asset
owners/operators. Respondents are from a range of executive-level
positions — senior executives to mid-level and front-line managers
— providing an industry-wide perspective. Respondents also come
from a wide range of functions, including strategy/planning, sales/
business development, engineering/technical, project management,
and commercial/finance. •

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OFFSHORE OUTLOOK •

Boom in US offshore wind to boost


America’s energy suppliers
$50 billion capex by 2030 extends potential windfall across supply chain

STEPHANIE MCCLELLAN, UNIVERSITY OF DELAWARE

THERE IS VERY GOOD REASON to be bullish about the forecast


for America’s emerging new offshore wind power (OSW) industry.
Even more reason to be buoyed by the new business opportuni-
ties it will generate for suppliers and developers across the US off-
shore energy sector.
Six East Coast states – Massachusetts, New York, New Jersey,
Rhode Island, Connecticut and Maryland – are proceeding with
firm plans for almost 10 GW of OSW by 2030. Analysis shows it
will require close to $50 billion in capex to bring this new capacity
online, which will supply steady, market-priced OSW power to light
up boardwalks and boardrooms for consumers and businesses up
and down the Atlantic seaboard.
Importantly, building it means we will be able to leverage the
offshore expertise and synergies of the US oil and gas sector, with
a supply chain that stretches from the East Coast into the central
US and the Gulf of Mexico. Industry experts estimate 70% of the Offshore wind turbines near Block Island, Rhode Island. Source:
capex to install and operate these new offshore wind farms can Deepwater Wind
be delivered by the US
supply chain.

SECRETS TO US
OSW SUCCESS
It has been a long time
coming. But the road-
map is now defined
and progress well
under way to build a
new US heavy indus-
try to supply America’s
vast market for OSW
power. The early focus
has been the Atlantic
coast, which put the
first US OSW “steel
in the water” with the
30-MW wind farm off
Block Island, Rhode
Island, and has policy
commitments and
market impetus to
develop 10 GW more
by 2030.
And we expect
this number to grow.

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• OFFSHORE OUTLOOK

F1: CUMULATIVE OFFSHORE WIND POWER CONTRACTS FORECAST and stand taller than San Francisco’s Transamerica
Pyramid. Advances in OSW turbine cost-efficiency
For six northeastern states through 2030 Contracted and size are remarkable
60 12,500 90 MW-NY feats of technology and
368 MW-MD
may be the most visible
800 MW-MA
elements of new US OSW
Capex estimate (US $, billions)

50 In negotiation
10,000
400 MW- RI farms (though barely,
40 200 MW-CT given the distance from
7,500 Solicitations scheduled
800 MW-NY
shore of most new US

MWs
30 400 MW-RI projects). But turbines
5,000
800 MW- MA represent only a fraction
1,100 MW- NJ
20 of the total capex required
Solicitations predicted
1,600 MW- NY to operate and install 10
2,500 Others - for state goals GW of OSW off America’s
10
2,400 MW- NJ shores.
500 MW-MD
0 0 200 MW-RI
This is where OSW
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total: 9,658 MW synergies with America’s
Source: RCG analysis; Special Initiative on Offshore Wind (SIOW), University of Delaware, offshore energy sector
College of Earth, Ocean & Environment.
come in. When Deepwater Wind installed OSW
turbines off Block Island, it contracted with Loui-
siana’s Gulf Island Fabrication, which constructs oil rigs, to build
Several states – including Massachusetts, New York, and New Jer- the foundations. Liftboat operator SEACOR Marine, also based in
sey – are taking steps to advance their OSW progress and goals. Louisiana, transported them by barge to the wind farm site. And
Others – including Virginia, North Carolina, and California – are a number of US companies, including vessel operators, are forging
making pledges and plans to join the leaders. The Department of partnerships with experienced OSW suppliers to ensure the US OSW
Energy (DOE) reports the project pipeline for US OSW has reached industry has the Jones Act compliant vessels it needs.
25.5-GW potential capacity, with 37 projects in 13 states on the East By the end of 2018, signed power contracts for US OSW were
and West Coasts, Great Lakes, and Hawaii. By 2050, DOE says 86 expected to total 1.6 GW. New York and New Jersey have issued
GW of OSW will support 160,000 US jobs.
Policy certainty from this commitment to scale by states has F2: US OFFSHORE WIND SUPPLY CHAIN
been a critical factor in kick-starting the US OSW industry. It has
Key elements - cost breakout by percentage
given market visibility and a future order book to spur competition, Substation maintenance
Subsea cable maintenance
encourage institutional investors, and drive down costs, as occurred & service 1.7% & service .8%
Project development
in Europe where OSW now produces almost 20 GW of cost-com- Foundation maintenance & management 2.9%
petitive power. In Massachusetts, contracts for its first 800 MW of & service .8% Nacelle, rotor
& assembly 10.7%
OSW with Vineyard Wind came in at a remarkable $65/MWh for Turbine
maintenance
the final project phase, significantly below expectations and saving & service 23.4% Blades 5%
consumers as much as $1.4 billion. 2.9% Tower 1.7%
17.4%
For US OSW, “going big” is essential to generate necessary econ-
Foundation
omies of scale and reduce levelized cost of energy (LCOE). This was 41.6% supply 7.7%
22%
confirmed in research by the Special Initiative on Offshore Wind
Array cable
(SIOW) into key drivers for OSW success. In 2015, a study for the 16.1% supply 2.2%
Wind farm
state of New York quantified the role of scale in cutting costs for operation 14.9% Export cable
supply 5.1%
ratepayers and raising benefits for the state. In 2016, a study for
Onshore & Offshore
the state of Massachusetts found the best way to lower LCOE was Other installation 1.3% substaion supply 6.6%
clear commitments to a big OSW market. Export cable Operational
installation 3.1% infrastructure .4%
Array cable Turbine installation 3.2%
OUTLOOK FOR POWER, SUPPLY CHAIN CONTRACTING installation 4%
Foundation
Two years later, US OSW is on a roll – with policy support from installation 4.5%
state houses to the White House, robust market confidence, and Turbines Operations,
maintenace, & service
burgeoning activity to build a supply chain and infrastructure at Ballance of plant
Project development
key US ports. Installation & & management
To continue cutting costs, the size of OSW turbines is also growing commissioning
along with the scale of total GWs to be installed. New OSW turbines Source: New York State Energy Research Development Authority; Special Initiative
are being tested or planned that reach or exceed 10 MW of power on Offshore Wind (SIOW), University of Delaware, College of Earth, Ocean & Environment.

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OFFSHORE OUTLOOK •

solicitations, respectively, for 800 MW and be the best regional teams and industry leaders with vision to tap this vast resource. Con-
1.1 GW more OSW, which will increase total tenders are sizing up the competition, scaling up their GWs, and sprinting out of the gate.
expected power contracts to roughly 3.5 GW Let the competition begin. •
by 2020. Through 2030, capex opportuni-
ties will continue to expand as more con- THE AUTHOR
tracts are signed, to nearly $50 billion for 10 Dr. Stephanie McClellan, Director, Special Initiative on Offshore Wind, Univer-
MW of US OSW. The primary initial spend sity of Delaware
through 2020 will be for support vessels to
install and operate the growing fleet of US
offshore wind farms. In 2020, we expect to
see additional work packages signed, with
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OSW teams.
In October, Danish OSW leader Ørsted
purchased Rhode Island-based Deepwater
Wind, marking a consolidation of European
and US OSW industry expertise and willing-
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When Massachusetts and Rhode Island
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how across sectors and policies that unleash


the power of the marketplace. Winners will

DECEMBER 2018/JANUARY 2019   OFFSHORE | WWW.OFFSHORE-MAG.COM43

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 GULF OF MEXICO

The Dover discovery was drilled


by the Transocean Deepwater
Poseidon ultra-deepwater
drillship. (Courtesy Shell)

Operators make handful of important


deepwater discoveries in 2018
Norphlet play figures prominently in new findings

BRUCE BEAUBOUEF, MANAGING EDITOR

THE OUTLOOK for deepwater drilling in the Gulf of Mexico shows how, through exploration, we are sustaining a strong pipe-
has been slowly improving over the past year. The number of line of discoveries and future projects to sustain this deepwa-
drilling rigs in the Gulf is up by four, from 19 to 23, compared ter growth.”
to last year, according to the Baker Hughes rig count of Dec. 14, Whale is operated by Shell (60%) and co-owned by Chevron
2018. And that number is up by one compared to two years ago U.S.A. Inc. (40%). It was discovered in the Alaminos Canyon block
(2016), when the active US GoM rig count stood at 22. 772, adjacent to the Shell-operated Silvertip field and approxi-
And, operators reported finding a number of new and import- mately 10 mi (16 km) from the Shell-operated Perdido platform.
ant oil discoveries in the deepwater US Gulf in 2018. “Whale builds on Shell’s successful, nearly 40-year history in
In January, both Shell and Total announced new deepwater the deepwaters of the Gulf of Mexico and is particularly special
discoveries. Shell Offshore Inc. reported that it had made one in that it offers a combination of materiality, scope and prox-
of its largest US Gulf of Mexico exploration finds in the past imity to existing infrastructure,” said Marc Gerrits, Executive
decade from its Whale deepwater well. The well encountered Vice-President Exploration for Royal Dutch Shell. “The result
more than 1,400 net ft (427 m) of oil-bearing pay. Evaluation of is another opportunity to think differently about ways we can
the discovery is ongoing, and appraisal drilling is under way to competitively develop deepwater resources.”
further delineate the discovery and define development options.  This major discovery in a key Shell production area added to
“Deepwater is an important growth priority as we reshape the company’s Paleogene exploration success in the Perdido area.
Shell into a world-class investment case,” said Andy Brown, Through exploration, Royal Dutch Shell says it has added more
Upstream Director for Royal Dutch Shell. “Today’s announcement than 1 Bboe resources in the last decade in the Gulf of Mexico.

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GULF OF MEXICO •

Shell described its Dover exploration well in the Norphlet geologic


play as a “large oil discovery.” (Courtesy Shell)

Total added to its deepwater reserves with its Ballymore


prospect in the Eastern GoM, which it described as “a major
oil discovery.” The well was drilled to a final depth of 29,193 ft
(8,898 m) and encountered 673 ft (205 m) of net oil pay in a high
quality Norphlet reservoir.
Arnaud Breuillac, President Exploration & Production at Total described its Ballymore prospect in the Eastern GoM as “a
Total, said: “This major discovery gives us access to large oil major oil discovery.” (Courtesy Total)
resources and follow on potential in the emerging Norphlet
play. It also demonstrates all the interest of Total’s GoM farm-in (Central GoM) and Norphlet (Eastern GoM) plays thanks to
agreement with Chevron, where we acquired a 40% interest in an agreement signed with Chevron last September, and in the
Ballymore. While already deemed commercially viable, we will Jack field where the group will acquire a 25% interest as part
work together on the appraisal of this discovery and a cost-ef- of the Maersk Oil deal.”
fective scheme to ensure a rapid, low breakeven development.” Discovered in the Wilcox play in 2014, Anchor is about 140
Located in water depth of about 6,562 ft (2,000 m) and 75 mi (225 km) offshore Louisiana in more than 4,921 ft (1,500 m)
mi (120 km) from the Louisiana coast, the Ballymore prospect of water. Anchor is operated by Chevron (55%) alongside Cobalt
covers four blocks in the Norphlet play, including Mississippi (20%), and Venari (12.5%).
Canyon block 607 where the discovery was made. Shell added to its deepwater findings in May, when it reported
Total’s acquisition of a 40% working interest in Ballymore was that it had made a “large oil discovery” with its Dover explora-
part of an exploration agreement with Chevron (60%, operator) tion well in the Norphlet geologic play in the deepwater Gulf.
signed in September 2017 that included seven prospects cov- The Dover discovery, drilled by the Transocean Deepwater
ering 16 blocks in the Norphlet (Eastern GoM) and the Wilcox Poseidon ultra-deepwater drillship, is Shell’s sixth in the Nor-
(Central GoM) plays. phlet and encountered more than 800 net ft (244 m) of pay.
“Ballymore is the largest discovery by Total in the prolific The well was drilled in Mississippi Canyon block 612, located
Gulf of Mexico and bolsters our new exploration strategy put about 170 mi (273 km) southeast of New Orleans, in a water
in place since 2015,” said Kevin McLachlan, Senior Vice Presi- depth of 7,500 ft (2,280 m) to a total vertical drilling depth of
dent Exploration at Total. 29,000 ft (8,839 m) measured depth.
Total also increased its access to the Gulf ’s deepwater reserves Andy Brown, Upstream Director for Royal Dutch Shell, said:
by acquiring an interest in the Anchor discovery in the Green “Dover showcases our expertise in discovering new, commercial
Canyon area. It did so through an agreement with Samson to resources in a heartland helping deliver our deepwater growth
acquire Samson Offshore Anchor, LLC, which held a 12.5% priority. By focusing on near-field exploration opportunities in
interest in four blocks covering the deepwater Anchor discov- the Norphlet, we are adding to our resource base in a prolific
ery in the Gulf of Mexico. The deal also included a 12.5% inter- basin that will be anchored by the Appomattox development.”
est in the nearby Green Canyon block 761, where Total already The discovery is located about 13 mi (21 km) from the Appo-
has a 25% interest. mattox host and is considered an attractive potential tieback. •
Arnaud Breuillac, President Exploration & Production at
Total, said: “The entry in the Anchor discovery further increases For more on deepwater discoveries made in the Gulf of Mexico,
turn to Offshore’s annual survey starting on page 46.
Total’s footprint in deepwater Gulf of Mexico. It follows our entry
in seven exploration prospects located in the promising Wilcox

DECEMBER 2018/JANUARY 2019   OFFSHORE | WWW.OFFSHORE-MAG.COM45

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• GULF OF MEXICO

Status of US Gulf of Mexico deepwater discoveries


Year Water
of depth Projected Prod.
Field name Location disc. (ft) Operator Status Onstream onstream Type*
Aconcagua Mississippi Canyon 305 1999 7,039 Marubeni Producing 2002 — SS
Allegheny South Green Canyon 298 2005 3,280 ENI Producing 2005 — SS
Amethyst Mississippi Canyon 26 2014 1,122 Talos Energy Producing 2016 — SS
Anchor Green Canyon 807 2015 5,183 Chevron Appraisal — — —
Anduin Mississippi Canyon 755 2005 2,400 W&T Producing 2007 — SS
Anduin West Mississippi Canyon 754 2008 2,696 LLOG Producing 2010 — SS
Appaloosa Mississippi Canyon 459 2008 2,500 ENI Producing 2011 — SS
Appomattox Mississippi Canyon 392 2010 7,290 Shell Development — 2019 FPS
Aspen Green Canyon 243 2001 3,063 Walter Producing 2002 — SS
Atlantis Green Canyon 699 1998 6,133 BP Producing 2007 — Semi
Atlas Lloyd Ridge 50 2003 9,000 Anadarko Producing 2007 — SS
Atlas NW Lloyd Ridge 5 2004 8,810 Anadarko Producing 2007 — SS
Balboa East Breaks 597 2001 3,373 Apache Producing 2010 — SS
Ballymore Mississippi Canyon 607 2018 6,562 Chevron Appraisal — — —
Barataria Mississippi Canyon 521 2015 6,771 Kosmos Energy Producing 2017 — SS
Bass Lite Atwater Valley 426 2001 6,623 Apache Producing 2008 — SS
Big Bend Mississippi Canyon 698 2012 7,200 Fieldwood Energy Producing 2015 — SS
Big Foot Walker Ridge 29 2006 5,000 Chevron Producing 2018 — TLP
Black Widow Ewing Bank 966 1998 1,840 — Apache Producing 2000 — SS
Blind Faith Mississippi Canyon 696 2001 6,900 Chevron Producing 2008 — Semi
Blue Wing Olive Mississippi Canyon 427 2016 5,800 LLOG Development — 2019 SS
Boomvang East Breaks 642 1997 3,539 Anadarko Producing 2002 — Spar
Boomvang North East Breaks 599 2001 3,153 Anadarko Producing 2007 — SS
Boris Green Canyon 282 2001 2,393 BHP Producing 2003 — SS
Brutus Green Canyon 158 1989 2,985 EnVen Energy Ventures Producing 2001 — TLP
Brutus Ru Green Canyon 202 2002 3,160 EnVen Energy Ventures Producing 2003 — SS
Buckskin Keathley Canyon 872 2009 6,920 LLOG Development — 2019 SS
Caesar Green Canyon 683 2006 4,500 Anadarko Producing 2012 — SS
Caicos Green Canyon 564 2016 4,225 BHP Appraisal — — —
Callisto Mississippi Canyon 876 2001 7,800 Anadarko Producing 2011 — SS
Calpurnia Green Canyon 727 2017 4,330 Anadarko Appraisal — — SS
Camden Hills Mississippi Canyon 348 1999 7,213 Shell Producing 2002 — SS
Cardamom Garden Banks 427 2010 2,720 Shell Producing 2014 — SS
Cardona Mississippi Canyon 29 2014 2,135 Talos Energy Producing 2014 — SS
Cardona South Mississippi Canyon 29 2014 2,135 Talos Energy Producing 2014 — SS
Cascade Walker Ridge 206 2002 8,203 Petrobras Producing 2012 — FPSO
Cheyenne Lloyd Ridge 399 2004 8,987 Anadarko Producing 2007 — SS
Chinook Walker Ridge 469 2003 8,826 Petrobras Producing 2012 — SS
Claiborne Mississippi Canyon 794 2015 1,500 LLOG Development — 2019 SS
Clipper Green Canyon 299 2005 3,452 Bennu Oil & Gas Producing 2013 — SS
Coelacanth Ewing Bank 834 2012 1,186 Walter Development — 2019 FP
Conger Garden Banks 215 1998 1,450 Hess Producing 2000 — SS
Constellation Green Canyon 627 2014 4,385 Anadarko Development — 2019 SS
Constitution Green Canyon 680 2003 5,100 Anadarko Producing 2006 — Spar
Coronado Walker Ridge 98 2013 6,127 Chevron Appraisal — — —
Cottonwood Garden Banks 244 2001 2,000 Petrobras Producing 2007 — SS
Crosby Mississippi Canyon 899 1997 4,400 Shell Producing 2001 — SS
Crown & Anchor Viosca Knoll 959 2015 4,300 LLOG Producing 2018 — SS
Dalmatian DeSoto Canyon 48 2008 5,876 Murphy Producing 2014 — SS
Dalmatian South DeSoto Canyon 134 2012 6,394 Murphy Producing 2014 — SS
Danny Garden Banks 506 2007 2,700 Talos Energy Producing 2010 — SS
Daniel Boone Green Canyon 646 2004 4,230 W&T Producing 2009 — SS
Dantzler Mississippi Canyon 782 2013 6,580 Fieldwood Energy Producing 2015 — SS
Dawson Garden Banks 669 2001 3,000 Anadarko Producing 2004 — SS
Dawson Deep Garden Banks 625 2004 2,900 Anadarko Producing 2006 — SS
Deimos Mississippi Canyon 806 2002 3,000 Shell Producing 2005 — SS
Delta House - Marmalard Mississippi Canyon 300 2012 5,781 LLOG Producing 2015 — FPS
Delta House - Son of Bluto II Mississippi Canyon 431 2012 5,013 LLOG Producing 2015 — FPS
Devils Tower Mississippi Canyon 773 1999 5,607 ENI Producing 2004 — Spar
Diana East Breaks 945 1990 4,670 ExxonMobil Producing 2000 — Spar
Diana South Alaminos Canyon 65 1996 4,679 ExxonMobil Producing 2000 — SS
Don Larsen East Breaks 598 2001 3,416 Anadarko Producing 2007 — SS
Dorado Viosca Knoll 915 2002 4,023 Anadarko Producing 2009 — SS
Dover Mississippi Canyon 612 2018 7,500 Shell Appraisal — — —

46 WWW.OFFSHORE-MAG.COM | OFFSHORE   DECEMBER 2018/JANUARY 2019

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GULF OF MEXICO •

Status of US Gulf of Mexico deepwater discoveries


Year Water
of depth Projected Prod.
Field name Location disc. (ft) Operator Status Onstream onstream Type*
Droshky Green Canyon 244 2007 2,900 Marathon Producing 2010 — SS
Durango Garden Banks 667 2001 3,150 Anadarko Producing 2004 — SS
Einset Viosca Knoll 873 1998 3,500 Shell Producing 2002 — SS
Europa Mississippi Canyon 935 1994 3,900 Shell Producing 2000 — SS
Ewing Bank 1006 Ewing Bank 1006 2003 1,854 Walter Producing 2005 — SS
Ewing Bank 998 Ewing Bank 998 2009 1,000 Walter Producing 2011 — SS
Ewing Bank 878 Ewing Bank 878 2000 1,523 Walter Producing 2001 — SS
Falcon East Breaks 579 2001 3,400 Marubeni Producing 2003 — SS
Fastball Viosca Knoll 1003 1999 3,000 W&T Producing 2009 — SS
Fort Sumter Mississippi Canyon 566 2016 7,062 Shell Appraisal — — —
Friesian Green Canyon 599 2006 3,830 Anadarko Appraisal — — —
Front Runner Green Canyon 338 2000 3,500 Murphy Producing 2004 — Spar
Front Runner South Green Canyon 339 2001 3,500 Murphy Producing 2005 — SS
Garden Banks 205 Garden Banks 205 2002 1,329 LLOG Producing 2005 — SS
Geauxpher Garden Banks 462 2008 2,820 Apache Producing 2009 — SS
Genghis Khan Green Canyon 652 2005 4,300 BHP Producing 2007 — SS
Gila Keathley Canyon 93 2013 4,900 BP Appraisal — — —
Gladden Mississippi Canyon 800 2008 3,116 W&T Producing 2011 — SS
Glider Green Canyon 248 1996 3,300 EnVen Energy Ventures Producing 2004 — SS
Goldfinger Mississippi Canyon 771 2004 5,423 ENI Producing 2005 — SS
Goose Mississippi Canyon 751 2003 1,548 LLOG Producing 2012 — SS
Gotcha Alaminos Canyon 856 2006 7,800 Total Development — — SS
Great White Alaminos Canyon 857 2002 8,009 Shell Producing 2010 — Spar
Guadalupe Keathley Canyon 10 2014 3,992 Chevron Appraisal — — —
Gunflint Mississippi Canyon 948 2008 6,100 Fieldwood Energy Producing 2016 — SS
Gunnison Garden Banks 668 2000 3,131 Anadarko Producing 2003 — Spar
Habanero Garden Banks 341 1999 2,001 Shell Producing 2003 — SS
Hadrian South Keathley Canyon 919 2009 7,425 ExxonMobil Producing 2015 — SS
Harrier East Breaks 759 2003 3,609 Marubeni Producing 2004 — SS
Hawkes Mississippi Canyon 509 2001 4,174 ExxonMobil Possible — — FPS
Healey Green Canyon 82 2007 2,420 W&T Appraisal — — —
Heidelberg Green Canyon 903 2009 5,300 Anadarko Producing 2016 — Spar
Holstein Green Canyon 644 1999 4,292 Anadarko Producing 2004 — Spar
Holstein Deep Green Canyon 643 2014 2,890 Anadarko Development — 2019 SS
Hoover Alaminos Canyon 25 1997 4,806 ExxonMobil Producing 2000 — Spar
Horn Mountain Mississippi Canyon 126 1999 5,400 Anadarko Producing 2002 — Spar
Isabela Mississippi Canyon 562 2007 6,500 BP Producing 2012 — SS
Jack Walker Ridge 759 2004 7,000 Chevron Producing 2014 — FPS
Jubilee Atwater Valley 349 2003 8,800 Anadarko Producing 2007 — SS
Jubilee Extension Lloyd Ridge 309 2005 8,774 Anadarko Producing 2007 — SS
Julia Walker Ridge 627 2007 7,087 ExxonMobil Producing 2016 — SS
K2 Green Canyon 562 2002 3,956 Anadarko Producing 2005 — SS
K2 North Green Canyon 518 2004 4,000 Anadarko Producing 2006 — SS
Kaikias Mississippi Canyon 2014 4,575 Shell Producing 2018 — SS
Kaskida Keathley Canyon 292 2006 5,860 BP Appraisal — — —
Katmai Green Canyon 40 2014 2,100 Fieldwood Energy Appraisal — — —
Khaleesi Green Canyon 389 2017 3,552 LLOG Appraisal — — —
King Mississippi Canyon 764 1997 2,940 Shell Producing 2000 — SS
King Mississippi Canyon 84 1993 5,386 Anadarko Producing 2002 — SS
King Kong Green Canyon 472 1989 3,799 ENI Producing 2002 — SS
King West Mississippi Canyon 84 2002 5,430 Anadarko Producing 2003 — SS
King’s Peak Desoto Canyon 133 1992 6,541 BP Producing 2002 — SS
Kodiak Mississippi Canyon 771 2008 4,829 Kosmos Energy Producing 2016 — SS
LaFemme Mississippi Canyon 427 2016 5,800 LLOG Development — 2019 SS
Ladybug Garden Banks 409 1997 1,360 Union Oil Co. of California Producing 2001 — SS
Leon Keathley Canyon 642 2014 6,119 Repsol Appraisal — — —
Llano Garden Banks 386 1997 2,294 Shell Producing 2004 — SS
Logan Walker Ridge 969 2011 7,750 Equinor Appraisal — — —
Longhorn Mississippi Canyon 502, 546 2006 2,461 ENI Producing 2009 — SS
Lorien Green Canyon 199 2003 2,179 Fieldwood Energy Producing 2006 — SS
Lost Ark East Breaks 421 2001 2,740 Fieldwood Energy Producing 2002 — SS
Lucius Keathley Canyon 875 2009 7,100 Anadarko Producing 2015 — Spar
Mad Dog Green Canyon 826 1999 4,400 BP Producing 2005 — Spar
Madison Alaminos Canyon 24 1998 4,854 ExxonMobil Producing 2002 — SS

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• GULF OF MEXICO

Status of US Gulf of Mexico deepwater discoveries


Year Water
of depth Projected Prod.
Field name Location disc. (ft) Operator Status Onstream onstream Type*
Magellan East Breaks 424 2007 2,800 Apache Appraisal — — SS
Magnolia Garden Banks 783 1999 4,700 ConocoPhillips Producing 2004 — TLP
Manatee Green Canyon 155 1998 1,940 Shell Producing 2002 — SS
Mandy Mississippi Canyon 199 2010 2,465 LLOG Producing 2012 — SS
Marco Polo Green Canyon 608 2000 4,300 Anadarko Producing 2004 — TLP
Mars B Mississippi Canyon 807 1989 3,100 Shell Producing 2014 — TLP
Mars B - West Boreas Mississippi Canyon 762 2004 3,112 Shell Producing 2014 — SS
Mars B - South Deimos Mississippi Canyon 762 2010 3,122 Shell Producing 2014 — SS
Marshall East Breaks 949 1998 4,376 ExxonMobil Producing 2001 — SS
Matterhorn Mississippi Canyon 243 1991 2,862 W&T Producing 2003 — TLP
Medusa Mississippi Canyon 582 1999 2,125 Murphy Producing 2002 — Spar
Medusa North Mississippi Canyon 538 2003 2,185 Murphy Producing 2005 — SS
Mensa Mississippi Canyon 731 1986 5,300 Shell Producing 2000 — SS
Merganser Atwater Valley 37 2002 7,900 Anadarko Producing 2007 — SS
Mica/Mickey Mississippi Canyon 211 1990 4,314 ExxonMobil Producing 2001 — SS
Mirage Mississippi Canyon 941 1991 3,914 Bennu Oil & Gas Producing 2010 — SS
Mississippi Canyon 401 Mississippi Canyon 401 2002 1,134 Apache Producing 2005 — SS
Mississippi Canyon 68 Mississippi Canyon 68 2000 1,353 Walter Producing 2001 — SS
Mississippi Canyon 837 Mississippi Canyon 837 2001 1,520 Walter Producing 2003 — SS
Mississippi Canyon 72 Mississippi Canyon 72 2008 2,013 LLOG Producing 2009 — SS
Moccasin Keathley Canyon 736 2011 6,739 Chevron Appraisal — — SS
Morgus Mississippi Canyon 942 1999 3,937 Bennu Oil & Gas Producing 2012 — SS
Mormont Green Canyon 478 2017 3,774 LLOG Appraisal — — —
Na Kika - Ariel Mississippi Canyon 429 1995 6,200 BP Producing 2004 — SS
Na Kika - Coulomb Mississippi Canyon 657 1988 7,600 Shell Producing 2004 — SS
Na Kika - E. Anstey Mississippi Canyon 607 1998 7,000 BP Producing 2004 — SS
Na Kika - Fourier Mississippi Canyon 522 1989 7,000 BP Producing 2004 — SS
Na Kika - Herschel Mississippi Canyon 520 1997 6,800 BP Producing 2004 — SS
Na Kika - Kepler Mississippi Canyon 383 1987 5,800 BP Producing 2004 — SS
Nansen East Breaks 602 1999 3,686 Anadarko Producing 2002 — Spar
Navajo East Breaks 690 2001 4,114 Anadarko Producing 2002 — SS
Neptune Atwater Valley 575 1995 6,162 EnVen Energy Ventures Producing 2008 — TLP
Nile Viosca Knoll 914 1997 3,534 BP Producing 2001 — SS
Northwest Navajo East Breaks 646 2002 3,937 Anadarko Producing 2003 — SS
Northwestern Garden Banks 200 1998 1,750 Hess Producing 2000 — SS
North Platte Garden Banks 959 2012 4,871 Total Appraisal — — —
Ochre Mississippi Canyon 66 2002 1,144 Apache Producing 2003 — SS
Odd Job Mississippi Canyon 215 2014 5,996 Kosmos Energy Producing 2016 — SS
Oregano Garden Banks 559 1999 3,400 Shell Producing 2001 — SS
Orion Mississippi Canyon 110 1998 1,200 BP Producing 2000 — SS
Otis Mississippi Canyon 79 2014 3,800 LLOG Producing 2016 — SS
Ozona Deep Garden Banks 515 2001 3,280 Marathon Producing 2011 — SS
Pardner Mississippi Canyon 400 2001 1,200 Anadarko Producing 2002 — SS
Pegasus Green Canyon 385 2005 3,491 ENI Producing 2008 — SS
Penn State Deep Garden Banks 216 1996 1,500 Hess Producing 1999 — SS
Perseus Viosca Knoll 830 2003 3,376 Chevron Producing 2005 — DT
Petronius Viosca Knoll 786 1995 1,754 EnVen Energy Ventures Producing 2000 — CT
Phoenix Green Canyon 236 1998 1,969 Talos Producing 2010 — FPU
Phobos Sigsbee Escarpment 39 2013 8,500 Anadarko Appraisal — — —
Power Play Garden Banks 258/302 2006 2,310 Anadarko Producing 2008 — SS
Prince Ewing Bank 1003 1999 1,450 EnVen Energy Ventures Producing 2001 — TLP
Princess Mississippi Canyon 765 2000 3,650 Shell Producing 2002 — SS
Prosperity Viosca Knoll 742 1997 1,000 Chevron Producing 2001 — DT
Puma Green Canyon 821 2004 4,130 BP Appraisal — — —
Pyrenees Garden Banks 293 2009 2,100 W&T Producing 2012 — SS
Q Mississippi Canyon 961 2005 7,925 Equinor Producing 2007 — SS
Quatrain Green Canyon 382 2002 3,500 Murphy Producing 2005 — SS
Raptor East Breaks 668 2003 3,600 Marubeni Producing 2004 — SS
Raton Mississippi Canyon 248 2006 3,400 Fieldwood Energy Producing 2008 — SS
Redrock Mississippi Canyon 204 2006 3,334 Fieldwood Energy Appraisal — — —
Red Zinger Mississippi Canyon 257 2016 6,000 LLOG Development — 2019 SS
Rydberg Mississippi Canyon 525 2014 7,479 Shell Appraisal — — —
Sargent Garden Banks 339 2008 2,240 Kosmos Energy Producing 2010 — SS
Samurai Green Canyon 432 2009 3,400 Anadarko Appraisal — — —

48 WWW.OFFSHORE-MAG.COM | OFFSHORE   DECEMBER 2018/JANUARY 2019

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GULF OF MEXICO •

Status of US Gulf of Mexico deepwater discoveries


Year Water
of depth Projected Prod.
Field name Location disc. (ft) Operator Status Onstream onstream Type*
San Jacinto DeSoto Canyon 618 2004 7,850 ENI Producing 2007 — SS
Santa Cruz Mississippi Canyon 563 2009 6,515 Fieldwood Energy Producing 2012 — SS
Sangria Green Canyon 177 1999 1,320 Apache Producing 2002 — SS
Santiago Mississippi Canyon 519 2011 6,500 Fieldwood Energy Producing 2012 — SS
Serrano Garden Banks 516 1996 3,400 Shell Producing 2001 — SS
Seventeen Hands Mississippi Canyon 299 2000 5,400 ENI Producing 2006 — SS
Shenandoah Walker Ridge 52 2009 5,750 LLOG Appraisal —— — —
Shaft Green Canyon 141 2008 1,016 LLOG Producing 2010 — SS
Shenzi Green Canyon 654 2002 4,400 BHP Producing 2009 — TLP
Shiloh DeSoto Canyon 269 2003 7,509 Shell Appraisal — — —
Silvertip Alaminos Canyon 815 2004 9,226 Shell Producing 2010 — SS
South Dachshund/Mondo NW
Lloyd Ridge 001 2005 8,340 Anadarko Producing 2007 — SS
Extension
South Dorado Viosca Knoll 915 2003 3,494 Anadarko Producing 2004 — SS
South Raton Mississippi Canyon 292 2007 3,400 Fieldwood Energy Producing 2012 — SS
South Santa Cruz Mississippi Canyon 563 2015 6,500 Kosmos Energy Producing 2017 — SS
Spiderman DeSoto Canyon 621 2003 8,100 Anadarko Producing 2007 — SS
St. Malo Walker Ridge 678 2003 6,900 Chevron Producing 2014 — FPS
Stampede - Knotty Head Green Canyon 512 2005 3,557 Hess Producing 2018 — TLP
Stampede - Pony Green Canyon 468 2005 3,440 Hess Producing 2018 — TLP
Stones Walker Ridge 508 2005 9,576 Shell Producing 2016 — FPSO
Stonefly Viosca Knoll 999 2016 4,119 LLOG Development — 2019 SS
Sturgis Atwater Valley 183 2003 3,700 Chevron Appraisal — — —
SW Horseshoe East Breaks 430 2000 2,285 Walter Producing 2005 — SS
Swordfish Viosca Knoll 961 2001 4,677 Fieldwood Energy Producing 2005 — SS
Tahiti Green Canyon 640 2002 4,017 Chevron Producing 2009 — Spar
Telemark Atwater Valley 63 2000 4,385 Bennu Oil & Gas Producing 2010 — SS
Thunder Hawk Mississippi Canyon 734 2004 5,724 Murphy Producing 2009 — Semi
Thunder Horse Mississippi Canyon 778 1999 6,103 BP Producing 2008 — Semi
Thunder Horse North Mississippi Canyon 776 2000 5,640 BP Producing 2009 — SS
Tiber Keathley Canyon 102 2009 4,132 BP Appraisal — — —
Ticonderoga Green Canyon 768 2004 5,250 Anadarko Producing 2006 — SS
Tiger Alaminos Canyon 818 2004 9,004 Chevron Appraisal — — —
Tobago Alaminos Canyon 859 2004 9,627 Shell Producing 2010 — SS
Tomahawk East Breaks 623 2003 3,514 Marubeni Producing 2004 — SS
Tornado Green Canyon 280 2016 2,760 Talos Energy Producing 2016 — SS
Tortuga Mississippi Canyon 561/605 2008 6,500 Fieldwood Energy Appraisal — — —
Trident Alaminos Canyon 903 2002 9,687 Chevron Producing 2010 — SS
Trion AE-0092/93 2002 8,202 BHP Appraisal — — —
Triton Mississippi Canyon 772 2002 5,610 ENI Producing 2005 — SS
Troubadour Mississippi Canyon 699 2013 7,273 Fieldwood Energy Appraisal — — —
Tubular Bells Mississippi Canyon 683 2003 4,300 Hess Producing 2014 — FPS
Tucker Walker Ridge 543 2006 6,778 Equinor Appraisal — — —
Tulane Garden Banks 158 2001 1,100 Hess Producing 2001 — SS
Valley Forge Mississippi Canyon 707 2004 1,538 LLOG Producing 2008 — SS
Vicksburg DeSoto Canyon 353 2007 7,457 Shell Development — 2020 FPS
Vito Mississippi Canyon 984 2009 4,038 Shell Development — 2021 FPS
Vortex Atwater Valley 261 2002 8,340 Anadarko Producing 2007 — SS
Warrior Green Canyon 518 2016 4,122 Anadarko Appraisal — — SS
West Navajo East Breaks 689 2002 3,905 Anadarko Producing 2003 — SS
West Tonga Green Canyon 726 2007 4,700 Anadarko Producing 2012 — SS
Whale Alaminos Canyon 772 2018 8,000 Shell Appraisal — —
Who Dat Mississippi Canyon 503 2007 3,099 LLOG Producing 2011 — FPS
Wide Berth Green Canyon 490 2009 3,700 Apache Producing 2012 — SS
Wildling-2 Green Canyon 520 2017 4,157 BHP Appraisal — — —
Winter Garden Banks 605 2009 3,400 W&T Appraisal — — —
Wrigley Mississippi Canyon 506 2005 3,700 W&T Producing 2007 — SS
Yeti Walker Ridge 160 2015 5,900 Equinor Appraisal — — —
Yosemite Green Canyon 516 2001 4,452 ENI Producing 2002 — SS
Yucatan Walker Ridge 95 2013 5,881 Shell Appraisal — — —
Zia Mississippi Canyon 496 1997 1,800 Marubeni Producing 2003 — SS
* CT is compliant tower. FP is fixed platform. FPS is floating production system. FPU is floating production unit. SS is subsea. DT is dry tree. TLP is tension leg platform.
Editor’s Note: First production year and development type are estimated for fields not yet onstream.

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• GULF OF MEXICO

Producing wells declining in the


shallow-water Gulf of Mexico
New deepwater wells replacing shut-ins

MARK J. KAISER, CENTER FOR ENERGY STUDIES, LSU

IN THE FOURTH PART of this five-part F1: PRODUCING WELL INVENTORIES IN THE SHALLOW
series on Gulf of Mexico (GoM) well trends, AND DEEPWATER GULF OF MEXICO.
producing and idle wells in the shallow
water and deepwater are examined. 9,000
< 400 ft
8,000
> 400 ft
PRELIMINARIES 7,000
Wells start to decline almost immediately 6,000
Producing wells

after they first produce. When wells stop 5,000


producing they collect in inventory, some- 4,000
times returning to production via recom-
3,000
pletion or a side track (although strictly
2,000
speaking this is a new wellbore that is
1,000
producing), and sometimes not return-
ing to production. 0
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
Wells fail for any number of reasons
and are shut-in for remedial work one or
Source: BOEM, March 2018
more times during their lifetime. Wells
will produce more and for longer peri-
ods with regular maintenance, which is F2: DRILLED, ABANDONED, AND PRODUCING WELLS
a primary reason subsea wells are aban- IN THE SHALLOW-WATER GULF OF MEXICO
doned at higher economic limits and tend
to leave more reserves in the ground than 50,000
Spud, <400 ft
dry tree wells. Some wells require more 45,000
PA+TA, <400 ft
intervention than others and the level of 40,000
Producing, <400 ft
intervention is one factor contributing to 35,000
Producing wells

production volatility. 30,000


When wells remain inactive for a long 25,000
period of time (i.e., several years) they have 20,000
likely depleted their reservoirs or have 15,000
mechanical problems that are not eco- 10,000
nomically justified to remediate. 5,000
0
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016

PRODUCING INVENTORY
In 2017, there were 3,463 wells in the GoM
Source: BOEM, March 2018
that produced hydrocarbons during the
last 12 months, 2,644 wells in water depth
<400 ft (122 m) and 819 wells in water relative to the total active well inventory, a mere 13% (2,644/20,989) in shallow water and
depth >400 ft. 18% (819/4,582) in deepwater, but this is not uncommon in offshore field development.
The number of producing wells varies
with the size and age of the well inven- PRODUCING INVENTORY TRENDS
tory, the time (i.e., month) of assessment, The number of producing wells in shallow water has declined markedly over the past
the number of wells completed each year, three decades. In 1985, there were 7,681 shallow-water producing wells, while circa 2017
and the development status of projects. there were 2,644 producing wells. Decline spikes in the years 2004-2005 and 2008 are
The number of producing wells is small attributed to hurricane activity and response.

50 WWW.OFFSHORE-MAG.COM | OFFSHORE   DECEMBER 2018/JANUARY 2019

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1901OFF50-52.indd 51
GreatPort_OS_1901 1 1/4/19 4:08
12/17/18 4:02 PM
PM
• GULF OF MEXICO

Every four years or so 1,000 wells have F3: DRILLED, ABANDONED, AND PRODUCING WELLS
dropped out of production. In 1997, more IN THE DEEPWATER GULF OF MEXICO
than 7,000 wells were producing; in 2003,
8,000
there were ~6,000 producing wells; in 2007, Spud, >400 ft
~5,000 producing wells; in 2011, ~4,000 7,000 PA+TA, >400 ft
producing wells; and in 2015, ~3,000 pro- 6,000 Producing, >400 ft
ducing wells.

Producing wells
5,000
If these dropout trends continue, which
4,000
seems likely considering the age of produc-
ing wells and the lack of replacements, by 3,000
2019 one might expect ~2,000 producing 2,000
wells, and by 2023 or so ~1,000 produc-
1,000
ing wells.
0
Deepwater producing wells are on a

1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
different trajectory than shallow water
with new wells replacing those that are
Source: BOEM, March 2018
shut-in. From 2002, there have been 800
or more producing deepwater wells most GULF OF MEXICO WELL INVENTORY CIRCA 2017
years, hitting a high in 2007 at 867 and <400 ft >400 ft Total
numbering 819 in 2017.
Drilled 46,243 6,733 52,964
Running totals of wells drilled, aban-
Permanently abandoned 25,254 2,151 27,405
doned, and producing for the shallow
Remaining 20,989 4,582 25,559
water and deepwater are depicted in the
accompanying figures. • Producing 2,644 819 3,463
Source: BOEM, March 2018

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with attendees wherever they
are from wherever you are.

Up to one hour in length, Offshore


webcasts provide an interactive
environment as if you were in the room.
Conduct your own Q&A and polls,
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wrap up, share videos, and upload
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Create
52 your interactive environment today. For upcoming sponsorship opportunities contact: David Davis | 713.963.6206
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GEOLOGY AND GEOPHYSICS •

CGG survey crew in a shallow boat on a stretch of


river in Gabon in 1932. (Image courtesy CGG)

Multi-client surveys highlight


opportunities offshore Africa
Integrated geoscience packages help reduce exploration risk

JO FIRTH, CGG

CGG HAS WORKED in Africa for more than 85 years. From the aid to development and near-field exploration. Access to large
first surveys in Gabon and Tunisia in the early 1930s, to today’s surveys in both mature and frontier areas allows oil companies
massive offshore 3D multi-client surveys, the company has con- to gain a better regional overview to reduce exploration risk at
sistently employed the latest technology to support the search an early stage and helps to reduce the time required from license
for oil and gas in Africa. award to well drilling in new areas. Small proprietary surveys
In today’s economic climate, large multi-client surveys are often leave holes in the data coverage, and usually have different
becoming increasingly popular for both exploration and devel- acquisition parameters and azimuths, making regional explo-
opment teams. Since costs can be shared and larger surveys ration more challenging. Large continuous and consistent sur-
acquired for a better overall view of the prospect, they provide veys help to reduce total exploration spending by drilling wells
a cost-effective means of acquiring high-quality data. Even in earlier and better de-risking. Having consistent high-quality
relatively mature basins, where acreage is shared by many oper- coverage over complete blocks also makes definition of areas
ators, multi-client surveys can be an efficient tool for use as an for relinquishment easier to determine.

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• GEOLOGY AND GEOPHYSICS

A modern seismic wider program of promotion of an area to attract investors


vessel towing 14 ahead of a licensing round. By working in partnership with an
streamers. (Image internationally respected geoscience company, governments
courtesy CGG)
can attract international investment by offering opportunities
with the backing of credible geoscience data and interpretation,
and benefit from their experience in marketing and successful
licensing round promotion. This enables governments to create
an environment which nurtures the local oil and gas industry
and the development of their natural resources. These programs
usually also include development programs for the local regu-
lators and national oil companies through knowledge-sharing
and a comprehensive range of geoscience training courses that
can be tailored to the local needs. This helps develop domestic
resources and supports local technology and skills development.
The company’s multi-client surveys are always processed
using state-of-the-art sequences to provide the best possible GABON
images in an area and to deliver a regional study without com- The Gabon South Basin survey is a prime example of a mod-
promising local detail. Today, almost all surveys are processed ern integrated multi-client geoscience package. The program
directly to depth (pre-stack depth migration), using advanced was designed in collaboration with the Direction Generale
velocity model building workflows, which blend together tech- des Hydrocarbures to cover all the blocks on offer for the 11th
nologies such as full-waveform inversion (FWI) and multi-layer Licensing Round, as well as some held blocks, in order to pro-
tomography, and are overseen by expert practitioners with vide a regional view of the basin. Ahead of the acquisition phase,
regional knowledge. These are increasingly driven by wells and existing legacy data and wave equation modeling were used to
include inversion for anisotropic parameters and incorporation determine the optimal offsets, record length, fold and azimuth
of visco-elastic (Q) effects, where appropriate. Ghost wavefield required as well as other acquisition parameters. The survey was
elimination (GWE) delivers broadband wavelets for improved acquired and processed using variable-depth-streamer technol-
resolution, as well as deeper penetration beneath complex ogy to maximize the bandwidth. Although the survey covered
overburdens. The improved low-frequency content, combined 25,000 sq km (9,653 sq mi), acquisition was completed in nine
with quality control throughout the processing sequence focus- months by using two vessels working in tandem. An advanced
ing on amplitude fidelity, amplitude versus offset (AVO) effects onboard processing system on one of the acquisition vessels
and comparison to wells (where available), provides data that enabled a fasttrack pre-stack time migration (PreSTM) data set
is delivered ready for reservoir characterization. for the 12,000 sq km (4,633 sq mi) acquired by this vessel (half of
the total survey area) to be delivered just three weeks after the
INTEGRATED GEOSCIENCE PACKAGES last shot. Both the full fasttrack PreSTM and a sample area of
In addition to high-quality seismic data volumes, recent pro- pre-stack depth migration (PreSDM), showing the potential of
grams, such as CGG’s completed Gabon and current Mozam- the data, were delivered four months after acquisition, in time
bique surveys, also deliver JumpStart integrated geoscience for evaluation ahead of the licensing round closure. This feat
packages. The major constituents of these packages are advanced shows that large surveys can be processed in a timely manner
multi-client geophysical and geological data, such as gravity, and need not cause delays. As part of the multi-client agreement,
magnetics, satellite imagery, an upgraded and ready-to-use well the licensing round was promoted at conferences, roadshows,
data set, and a coherent interpretation and evaluation frame- online, and in print. Virtual data rooms were also made available
work for the basin, which complement the seismic data. These via video conference link for potential bidders to view the data.
value-added products can help jumpstart exploration in an The subsurface imaging for this survey used the latest veloc-
area and accelerate development by providing the high-qual- ity model-building technology and was one of the first applica-
ity data needed to identify drill targets for appraisal and pro- tions of full-waveform inversion (FWI) to a data volume of this
duction wells further along the workflow. Provision of all these size, and the first of its size in Africa. FWI was applied over the
products from a single source can shorten decision times, and entire 25,000-sq km area down to the maximum depth reached
the integration of each into the broader workflow ensures bet- by diving-wave penetration, which for this data set, acquired with
ter-quality data. The goal is to reduce the time spent by clients 10-km (6.2-mi) long streamers, effectively coincided with the top
on conditioning and integrating the data and allow more time salt boundary. Below this level, advanced tomography was used.
to be spent on the generation of new play models and identifi- The image demonstrates some of the details captured in
cation of new prospects, or on the improvement of production the FWI velocity model. As well as the obvious turbidite chan-
from existing reservoirs. nels, there is evidence of low-velocity anomalies possibly due to
These large multi-client surveys are frequently provided in hydrocarbons and typically located directly above the salt diapirs.
collaboration with the local regulatory authority as part of a Incorporating these anomalies into the velocity model not only

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GEOLOGY AND GEOPHYSICS •

surveys agreed with INP in 2017, designed to accelerate under-


standing of the petroleum systems in the area. CGG plans to
acquire more data in the area including the acquisition of 2D
data in the Rovuma basin, which will link in with other planned
2D surveys in the region.
A fasttrack PreSTM data volume for the Zambezi basin survey
is available to license now, ahead of the recently announced 2019
Licensing Round. This data set delivers high-resolution images
of the Outer Zambezi Delta turbidite fans and channels as well
as exciting detail of faulting and layering in the basement core
of the Beira High that has not been seen before. It reveals key
details of the prospective outer Zambezi Delta Complex and
its interaction with the nearby Beira High. Subsurface imaging
Depth slice over part of the Gabon South Basin 3D survey showing
fine detail and clearly identifying turbidite channels.
technology is being applied to deliver high-resolution shallow
data at the same time as clear penetration and imaging of the
deep data. The final PreSDM data set will be available in 4Q 2019.
improves the image in both shallow and deep sections, but also
yields additional useful information about the near-surface, its
exploration potential, and possible geohazards.
Potential field data was acquired alongside the seismic data to
model crustal types and thicknesses for input to basin modeling.
The dense coverage of gravity and magnetic data acquired with
the 3D seismic enabled production of a unique set of high-res-
olution anomaly maps for use as an aid to the velocity model-
ing for the seismic imaging. The available wells in the area were
also re-interpreted and included in the velocity modeling but,
since this is a frontier area, few wells were available in the sur-
vey area and none that penetrated the salt.
Since delivery of the final seismic data volume, two wells Fasttrack image from the new Mozambique 3D survey showing
have been drilled in the survey area, namely Boudji-1 and Ivela- high-resolution shallow data and clearly defining structure in the
1, both of which found oil and were reported to tie well with the basement. (Image courtesy CGG Multi-Client & New Ventures)
seismic. The Boudji-1 well discovered a 90-m (295-ft) column
of good-quality oil-bearing sands and the Ivela-1 well found a REGENERATION OF OLDER DATA SETS
78-m (256-ft) gross oil column. The major advances in subsurface imaging and velocity mod-
The full JumpStart integrated geoscience package for the eling techniques over the past few years mean that reprocess-
Gabon South Basin is now complete. The study provides a new ing even relatively recent data sets can deliver significantly
regional stratigraphic interpretation as well as source, reservoir improved images. In addition, the bandwidth of conventionally
and trap risk, and an additional detailed well-tied seismic inter- acquired data can be significantly extended using GWE so that
pretation with attributes based on the new 25,000-sq km Broad- it approaches that of modern broadband data.
Seis data set. This integrated study is the definitive exploration
resource for the deepwater Gabon margin.
A new deepwater 2D survey, outboard of the area covered by
the 3D survey, is now planned to complement this study and
help define the full extent of existing and new plays in the area.
It will also aid understanding of the thickness variations in the
sediment overburden for source rock maturity analysis. The
broadband data will enable improved characterization of the
turbidite systems and provide deep penetration with low fre-
quencies to help describe the nature of the deep crust.

MOZAMBIQUE
The new Mozambique survey, recently acquired over the Beira
High region in the Zambezi Delta, will be another integrated
geoscience JumpStart package to support a licensing round. Example section from the recently reprocessed Angola-00 survey in
This 15,400-sq km (5,946-sq mi) 3D survey is the first of the block 33. (Image courtesy CGG Multi-Client & New Ventures)

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• GEOLOGY AND GEOPHYSICS

An example of this is the reprocessed Angola block 33 3D sur- based on consistent methods that can be used in data packages
vey, which is now available. This survey was reprocessed using for licensing rounds to attract investor interest in frontier areas.
a broadband PreSDM imaging sequence, taking advantage of In stratal slicing, the seismic volume is flattened in the geo-
recent advances in bandwidth extension. The survey covers the logical time domain along an interpreted 3D horizon, to enable
Calulu discovery and lies approximately 10 km southwest of the the mapping of lateral seismic facies variations along a constant
giant Dalia field. Block 33 is largely underexplored, with signif- depositional time slice. Changes in rock facies induce subtle
icant potential, especially in the presalt section. As the known changes in the seismic wavelet which are highlighted through
fields in this basin lie within Tertiary turbidites, the reprocess- spectral decomposition around three dominant frequencies.
ing has been especially designed to extend the bandwidth to This provides a clear picture of lateral seismic facies and enables
improve the resolution of this unit, while also providing clearer rapid evaluation of potential leads and prospects. The following
imaging through the complex salt structures in the area owing image shows the frequency decomposition of a stratal slice from
to the deep penetration of the low frequencies. one of the Cameroon data packages. The Cretaceous channel
and fan ( from top left to bottom right) are clearly delineated.
GETTING MAXIMUM VALUE FROM LEGACY DATA
In addition to offering high-quality modern seismic data sets, CAMEROON
the company also offers enhanced and revitalized legacy data The recent licensing round in Cameroon is an example of this
from GeoSpec, who specializes in regenerating and digitally use of legacy data. Data packages of enhanced legacy data were
transforming legacy data. They provide workstation-ready, created for the Rio Del Rey and Douala/Kribi-Campo basins, the
integrated data sets to expedite rapid evaluation of explora- two areas with blocks available to license. These enhanced Ter-
tion opportunities. Depending on the type of data available, this raCube data packages, consisting of workstation-ready, time-
may include scanning paper sections with reconstruction and and phase-matched, contiguous regional regridded 3D seismic
migration of the data, reprocessing from field tapes, or migra- data sets, 2D seismic, and integrated well and seismic montages,
tion of stacked data. The data is enhanced by time, phase, and combined with supplemental prospectivity reports, stratigraphic
amplitude matching to create consistent, zero-phased seismic, studies and databases, detailed the opportunities available for
where possible tied to well data, and with navigation data quality both basins ahead of the licensing round.
controlled, updated, and converted to a consistent projection. Cameroon is a proven hydrocarbon province with production
from both these basins. Significant further opportunities exist
for commercial hydrocarbon accumulations in both, with large
tracts of open acreage available in the recent licensing round.
The results of this have not yet been announced.

CONCLUSION
The company believes that integration of a range of geosci-
ence data with the highest-quality seismic will become the
gold standard for basin-scale multi-client studies. Incorpo-
rating insight gained from legacy data and knowledge of the
geology into the survey design means that optimum data can
be acquired, with the ideal offsets and azimuths to image the
target. The JumpStart combination of the best seismic images
with reservoir-quality data and value-added geoscience prod-
ucts can be used directly for exploration, play evaluation, well
location optimization, geohazard identification and reservoir
Frequency decomposition on a stratal slice of Cretaceous channel
and fan taken from a GeoSpec TerraCubeREGRID volume offshore delineation, characterization and modeling. These integrated
Cameroon. data packages are designed to provide a fuller understanding
of the petroleum system and deliver insight which will reduce
This type of enhanced legacy data is a useful starting point the time, risks, and challenges associated with exploration. This
for promoting and evaluating assets. Pre- and post-stack legacy should mean that more successful wells can be drilled, and oil
seismic data sets, well data, and any other information avail- company experts can focus on finding new plays, rather than
able, can be transformed, interpreted, and integrated to gen- sourcing and conditioning data.
erate value-added products in consistent, workstation-ready Major exploration projects are being conducted by many
formats. Consistent stratigraphic tops, tied to the seismic and companies all around Africa. There is evidence that significant
well data, are used to generate a series of regional surfaces, well discoveries are still to be made and many basins are not yet
and seismic montages, dry well analyses, velocity models, stratal fully understood. •
slices and other attribute volumes and interpretation products.
These provide cost-effective basin-wide reconnaissance products

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GEOLOGY & GEOPHYSICS 

Exploration returning offshore Mozambique


with prospect of oil in emerging plays
Majors lured by latest geological studies, reformed fiscal law

ANONGPORN INTAWONG, P. HARGREAVES, N. HODGSON, K. RODRIGUEZ, SPECTRUM GEO

MOZAMBIQUE HAS BEEN at the epi-


center of attention offshore East Africa
following Anadarko and Eni’s discoveries
of over 100 tcf from 2010 onwards in the
deepwater Rovuma basin off the country’s
northern coast. The Mozambique margin
to the south is also viewed as gas-prone
due largely to these finds and the smaller
deepwater gas discoveries farther north
off Tanzania.
However, the arguments for an oil
play in the Mozambique Channel and
East Zambezi basin are growing stron-
ger, based on natural oil seeps, analysis of
source rocks, and seismically interpreted
indicators. The hunt for oil is now on in
this potentially prolific area, and some
super-major oil companies are already
leading the way.

DETECTION METHODOLOGY
Satellite images can be examined for evi-
dence of oil floating on the surface of the
sea, caused by natural oil seeps generat-
ing oil slicks that appear in re-occurring,
persistent clusters that are visible for sev-
eral years. These slicks are indicative of an
underlying oil-generating petroleum sys-
tem that is clearly working - the ‘Holy Grail’
for explorers investigating new basins. The
technique takes advantage of the differ-
ence in the sea surfaces wave pattern, or
‘texture,’ between the sea surface in its nat-
ural state and with oil floating on top of it.
In suitable conditions the sea surface is
slightly rougher in an oil-free state, and an
oil slick will reflect sunlight in an anoma-
lous way that can be detected on the sat-
ellite image (MacDonald et al., 2015).
Over 240 satellite images acquired over Sea surface oil slick study extent and Spectrum’s recently acquired multi-client 2D seismic
the Mozambique Channel from 2013 to data over the Angoche basin, Mozambique Channel. (All images courtesy Spectrum Geo)
2017 have been analyzed to quantify
the number and distribution of sea sur- Mozambique Channel and the East Zambezi basin which lie between the Rovuma basin
face oil slicks in the Angoche basin, the to the north and the Zambezi Delta to the west.

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 GEOLOGY & GEOPHYSICS

likelihood that the oil slicks are indicative of a naturally occurring


thermogenic oil source. These slicks are then correlated with seis-
mic data to investigate the geological relationship of hydrocarbon
migrating from the source rock to a seep point where the oil enters
the sea and finally to the oil slick location. The results can pro-
vide key evidence of a working oil-generative petroleum system.

SEA SURFACE OBSERVATIONS


In total 120 sea surface slicks were identified across the study area,
with some found in clusters re-occurring over time. The majority
of the slicks line up at the shelf break along the coast of Mozam-
bique. On seismic it is evident that sedimentary sequences from
the Mozambique Channel dip upwards toward the steep pres-
ent-day shelf edge. Therefore, it is likely that a mature oil source
Sea surface oil slicks distribution and occurrence. Some are in clusters
re-occurring over time (highlighted in black circles). Onshore oil seeps in the center of the basin is responsible for hydrocarbon migration
are also in evidence at Angoche (shown as red star). up-dip and north or west toward the Mozambique shelf.
Some clusters of re-occurring oil slicks have been identified
along the abrupt compressed sedimentary package to the east
known as the Davie Ridge, which for many represents the strike
slip fault that allowed Madagascar to break away from Tanzania
in the Early Jurassic, moving southeast to its current location, at
the same time as Antarctica broke away from Mozambique mov-
ing south. Satellite scenes only cover the northern portion of the
Davie Ridge, but here again seismic shows that basinal sedimentary
sequences dip-up toward the ridge, suggesting that oil migration
and seepage are possibly controlled by the dip of the sediments.

OIL EVIDENCE/MIGRATION PATHWAYS


The distribution and occurrence of the slicks provides strong
evidence that there is a mature oil source in the Mozambique
Channel. It is not possible to identify from the distribution the
age of the source rock from whence it comes, but three possible
source rock intervals have been proposed. The oldest comprises
the Middle and Late Jurassic sequences deposited as Antarctica
moved south, forming a small enclosed basin idea for the deposi-
tion and preservation of organic rich shale. The overlying source
rocks of the Early Cretaceous marine shales are known from along
the East African coast and indeed globally as they were deposited
in periods of global deep-sea anoxia. Lastly, where fragments of
Example of sea surface oil slicks and their locations on Bouguer continental crust have been left behind by migrating continents,
gravity anomaly map and new multi-client broadband 2D seismic an older ‘Karoo’ age source rock may be found, especially along
coverage. and east of the Davie Ridge.
On seismic data these source rocks are observed to have strong
Distinguishing between human pollution and naturally occur- soft kicks at the top of the sequence, clear type 4 AVO anomalies
ring slicks is also critical. Various methods have been used to and reduction in frequency – all classic characteristics of effective
determine the origin of slicks, to ascertain whether they are geo- source rocks, applying Loseth et al. (2011)’s methodology. Other
logical seeps or superficial anthropogenic discharges. Many other evidence for direct hydrocarbon indication (DHIs) observed on
sources of apparent slicks need to be screened out such as areas of seismic includes: bottom simulating reflectors, pock marks, fluid
very low wind speed, upwelling, biogenic slicks from algal blooms, escape features, and high-amplitude (bright) reflectors. Some of
fishing activities, and fluvial run-off from land processes. There- the oil slicks appear to have a strong spatial correlation to pock
fore, the slicks identified within the study area were also checked marks, fluid escape features and shallow high-amplitude reflec-
using the diagnostic infra-red band data captured by the satellite. tors, and are supported by geological features such as fault and
By looking for locations with persistently re-occurring slicks erosional surface that can facilitate the migration of oil seeping
found on images taken on different days, and over months and to the sea surface.
years, random pollution events can be ruled out, with a greater More support for the oil play comes from onshore oil seeps at

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GEOLOGY & GEOPHYSICS •

Angoche and Mucifi (north of the study systems is growing rapidly but the best examples available are from the nearby Rovuma
area), which may be sourced from the Mid- basin, such as the reservoirs in the Lower Eocene Coral discovery (Palermo et al., 2014).
dle to Early Jurassic marine, or even the Late Cretaceous near-shore marine sandstones (Grudja formation) are the main reser-
Karoo (Mahanjane et al., 2014). Several oil voirs in the Pande, Buzi, Tamane and Inhassoro fields in southern Mozambique, exhib-
seeps have also been identified along the iting up to 30% porosity and up to 5,000 mD permeability (Matthews et al., 2001).
coastline west of the Ibo High in the south- Other than a source rock, the main ingredient required in petroleum system to gen-
ern Ruvuma (Davison and Steel, 2017). erate oil is heat. Too little heat, no oil is generated, while with too much heat, only gas
The ODP well 629B drilled on the conju- is generated. As the earth gets warmer with depth there is a need to find a source rock
gate Antarctica margin penetrated 45 m in the ‘Goldilocks Zone’ where the temperature is just right for generating oil. Recent
(147 ft) of Early Cretaceous (Valanginian)
source rocks containing Type II marine
kerogen, with an average of 10% TOC and
HI of 300-600 mg/g TOC (Thompson and
Dow, 1990).
Key to establishing more evidence that
the source rocks in this area are generat-
ing oil has been the acquisition of new 2D
seismic data in 2017, which has allowed
the industry’s understanding of the area’s
hydrocarbon potential to be refined,
thereby accelerating hydrocarbon explo-
ration activity. Ongoing seismic interpre-
tation and prospect mapping of the new
2D seismic data have already identified
potential targets in both structural and
stratigraphic trapping geometries along
this Mozambique margin.
In 2017 and 2018, Spectrum acquired a
multi-client 2D regional broadband seismic
survey designed to image the subsurface
potential in the Angoche basin, Mozam- HELPING TO DEVELOP A SAFE AND
bique Channel and East Zambezi basin,
thereby providing a more detailed under- SKILLED OIL AND GAS WORKFORCE
standing of the prospectivity in areas where
no wells have been drilled to date. Drill-
ing targets along the margin have already • Driving global standards and
been identified on these new data with qualifications
Cretaceous and Tertiary reservoir and seal- • Ensuring safety training is delivered
paired intervals identified in plays that to industry standards
include onlaps and drapes over basement • Assessing competence against industry
highs, stratigraphic and structural traps of approved criteria
deepwater slope channels and basin floor • Developing competency frameworks
fans, lowstand plays (both wedge and pro- alongside industry and local government
delta fan), drapes over strike-slip faulted
structures, and compressional plays near
the Davie Ridge.
250,000 people train to OPITO standards each year at one of
Enhanced clastic reservoir quality is to
over 200 OPITO approved training providers in 45 countries
be expected from turbidite systems inter-
acting with strong contourite or slope par-
allel drift bottom currents. In these ‘mixed
turbidite - contourite systems,’ turbidite
currents are thought to winnow, flowing
www.opito.com
down dip, taking away the silty fines and
leaving sand reservoirs of exceptional qual-
ity. Globally knowledge of such depositional

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 GEOLOGY & GEOPHYSICS

and contract legislation. This remarkable


result will certainly lead to a more positive
investment atmosphere and undoubtedly
strengthen operators’ confidence in future
hydrocarbon exploration in Mozambique.
Exploration is returning to offshore
Mozambique – but this time, the hunt is
for oil. 

REFERENCES
• Davison, I., and Steel, I., 2017. Geology
and hydrocarbon potential of the East
African continental margin: a review.
Petroleum Geoscience, 24, 57-91.
• Loseth, H., Wensaas, L., Gading, M.,
Duffaut, K., and Springer, M., 2011. Can
Bottom simulating reflectors, pock mark, and shallow high-amplitude reflectors found in
seismic profile showing strong relationship to sea surface oil slick. hydrocarbon source rocks be identi-
fied on seismic data?. Geology, 39 (12),
1167-1170.
• MacDonald, I. R., Garcia-Pineda, O.,
Beet, A., Daneshgar Asl, S., Feng, L.,
Graettinger, D. French-McCay, D. G.,
Holmes, J., Hu, C., Huffer, F., Leifer, I.,
Mueller-Karger, F., Solow, A., Silva,
M., and Swayze, G., 2015. Natural and
unnatural oil slicks in the Gulf of Mex-
ico, Journal of Geophysical. Research,
Oceans, 120, 8364–8380.
• Mahanjane, E.S., Franke, D., Lutz, R.,
Winsemann, J., Ehrhardt, A., Berglar,
K. and Reichert, C., 2014. Maturity and
Example of potential basin floor fan play within structural trap in the Early Cretaceous petroleum systems modelling in the
interval, with structural drapes over basement highs, and four-way dip-closed structures (A offshore Zambezi Delta depression
and B) extending over up to 509 and 207 sq km, respectively.
and Angoche Basin, Northern Mozam-
bique. Journal of Petroleum Geology, 37:
understanding of the influence of active rifting and the Comoros mantle plume causing 329–348.
elevated heat flow in the northern Rovuma basin has explained the anomalously high • Palermo, D., Galbiati, M., Famiglietti,
geothermal gradient - around 40°C/km - observed in wells in that area (Duncan MacGre- M.,·Marchesini, M., Mezzapesa, D.,
gor, personal communication, October 10, 2018). This high rate of increase in temperature Fonnesu, F., 2014, Insights into a New
with depth in Rovuma has meant that the source rocks in that area are heated beyond Super-Giant Gas Field - Sedimentology
the point where oil is generated and are forced to generate only methane gas. While this and Reservoir Modeling of the Coral
has produced copious quantities of gas, this will not occur in the Mozambique Channel Reservoir Complex Offshore North-
being farther from the Comoros mantle plume, across the Davie Ridge on young oceanic ern Mozambique. Offshore Technol-
crust. Indeed, the wells drilled in the Zambezi Delta show half the geothermal gradient, at ogy Conference, 25-28 March 2014, Kula
around 20-25°C/km (Duncan MacGregor, October 10, 2018), of those in Rovuma, result- Lumpur, Malaysia.
ing in the source rocks of Jurassic to Early Cretaceous age sitting in the peak oil window: • Thompson, K.F.M. and Dow, W.G., 1990.
the Goldilocks Zone. This analysis is supported by 1D basin modeling of Mahanjane et Investigation of Cretaceous and Tertiary
al. (2014). If these source rocks generate anything – they will generate oil. kerogens in sediments of the Weddell
Sea. In: Barker, P.F., Kennett, J.P., Mas-
NEXT-PHASE EXPLORATION terson, A. and Stewart, N.J. (ed.), Pro-
Following the success of exploration, appraisal and commercialization of gas in the ceedings of the Ocean Drilling Program,
Rovuma areas 1 and 4, it is significant that exclusive activities are now beginning in the Vol.113, College Station, Texas, 189-197.
East-Zambezi to Mozambique Channel area. Exploration and development rights of
the offshore blocks awarded under Mozambique’s fifth licensing round between the oil
companies and the National Petroleum Institute (INP) have led to a reformed fiscal law

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DRILLING & COMPLETION •

Industry advances managed pressure


drilling solutions
Automated, integrated systems aim for greater efficiency

BRUCE BEAUBOUEF, MANAGING EDITOR

OILFIELD EQUIPMENT PROVIDERS


and downhole service firms are raising
the bar for managed pressure drilling
(MPD) technologies and systems. These
new technologies will be of considerable
interest to offshore operators and drill-
ing contractors as they face increasingly
challenging deepwater reservoirs.
MPD systems allow drilling operations
to continue “at balance” in oil and gas
plays where primary well control cannot
meet the needs of pore pressures due to
weak fracture gradients in the well pro-
file. And, operators and drilling contrac-
tors are increasingly looking for MPD
systems that will enable them to access
reservoirs where conventional, hydro-
statically over-balanced drilling methods
encounter problems; and in drilling plays
where the margin between pore pressure
and fracture gradient is narrow.
Narrow pressure windows are increas-
ingly common when drilling in mature
deepwater fields, posing a formidable
challenge. This condition is character-
ized by a small difference between the
pore pressure – the fluid pressure inside
rock pores pushing out – and the fracture
gradient – the fluid pressure needed out-
side the rock to fracture it. When using
conventional drilling techniques, a small
change in wellbore pressure can repre-
sent the difference between profitable
success or costly failure. Common risks
include borehole instability, pressure
cycles that require breakouts, downhole
mud losses, surge and swab effects, and
AFGlobal’s MPD test rig is said to be capable of testing equipment to all requirements of API
even kicks. When market conditions are 16RCD. (Courtesy AFGlobal)
difficult, the thin margin for error means
the risks are even more pronounced. a tool to manage equivalent circulating density. It has revolutionized drilling in the
Fortunately, narrow pressure windows major deepwater and ultra-deepwater areas, such as Brazil, West Africa, the North
can be addressed using MPD techniques Sea, and the Gulf of Mexico, where it has been used for more than 10 years. Coupled
to precisely control the annular pressure with early kick detection, the technique helps operators avoid issues caused by nar-
throughout the wellbore. MPD is basically row pressure windows.

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• DRILLING & COMPLETION

Several new technologies have been introduced to the market components into scalable, fit-for-purpose packages that pro-
in recent months to address these challenges. Last May, Hallibur- vide safe, efficient drilling in closed-loop applications. From
ton announced its GeoBalance automated MPD system, which chokes and manifolds to rotating control devices and control
it described as a comprehensive suite of software and hardware systems, the company says that its MPD systems have been fully
that enables automated managed pressure control, from drill- integrated into the drilling rig for land, shelf, and deepwater seg-
ing to completion. Halliburton says that the system combines ments, as well as standalone systems that are compatible across
automatic chokes, rig pump diverters, flow metering, and control multiple segments.
algorithms with hydraulics modeling to provide pressure control Schlumberger has introduced what it describes as the indus-
at discrete points throughout well construction. The GeoBalance try’s first integrated MPD solution – designed to be an all-OEM,
system won an OTC Spotlight Award in 2018. reservoir-to-flare-stack deepwater MPD system, the company
Elsewhere, AFGlobal has introduced an array of new technol- said. The integrated MPD system would enable operators to
ogies and testing facilities that are expected to bolster its MPD minimize rig footprint while maximizing drilling efficiency and
portfolio and capabilities. In 2018, the company developed a test versatility by obtaining design and engineering, manufacturing,
rig that is designed for testing MPD equipment, while mimick- system integration, well engineering, and onsite well delivery ser-
ing actual drilling conditions, to better understand equipment vices from a single supplier. The integrated MPD solution won
performance. an OTC Spotlight Award in 2017.
AFGlobal also launched its proprietary Active Control Device On some drilling campaigns, MPD technologies are being
(ACD), which it says is the industry’s first purpose-built marine combined with other systems to enhance drilling and comple-
control device, replacing the traditional rotating control device tion efficiency. On a recent job in the Asia/Pacific region, Shell
(RCD) for deepwater applications. The company says that the identified the need for an MPD/managed pressure cementing
ACD provides the prerequisite seal and diversion of annular (MPC) solution on two water injection wells. The solution was
wellbore returns using a novel, non-rotating seal. Using propri- needed to maintain constant bottomhole pressure while drill-
etary sealing elements, the ACD is designed to eliminate bear- ing in a narrow pressure margin.
ings and rotating components that can be a regular source of The MPD/MPC control system was configured to receive
maintenance and failures in traditional RCDs. data from several ancillary sources for the best possible pressure
“We are leveraging our manufacturing experience and deploy- control downhole. MPC technology was successfully utilized to
ment of more than 40 MPD-ready systems to drive the next cement the liners on both wells in order to maintain equivalent
phase of MPD – active pressure management,” said Mark Mitch- circulating density above the sand stringer pore pressure, while
ell, President of Oil & Gas at AFGlobal. “Working closely with avoiding losses to weak shale/faulted zones. GB Setpoint, the
all the stakeholders, we have designed, built, and installed the Halliburton real-time hydraulics model, was an important asset
industry-leading equipment that is enabling a global fleet of during both the MPD and MPC operations. By incorporating real-
MPD ready rigs.” time data, tracking multiple fluids in the wellbore and account-
The development of these new technologies followed a ing for surge and swab while running the liner, the crew was able
contract award from Noble Corp. in 2017 which called upon to successfully navigate a narrow window within the target BHP.
AFGlobal to supply an integrated deepwater MPD system to Halliburton helped the operator avoid two weeks of NPT
vessels in the Noble Corp. rig fleet. Scott Marks, senior vice pres- related to borehole stability, reservoir influxes and losses, con-
ident of Engineering at Noble Corp., said: “The addition of MPD trolling the BHP at the critical point in the well during drilling
systems to our rig fleet will provide a valuable competitive advan- operations, including tripping and running and cementing the
tage with an expected higher level of safety and performance.” liner. This operation for Shell in Asia/Pacific is expected to pave
Weatherford is working to implement a standardized set of the way for similar operations in this region and beyond.
MPD equipment that will allow a rig to quickly address any num- Faced with the challenges that deepwater drilling and uncon-
ber of drilling and well control issues – kicks, lost circulation ventional reservoirs can bring, the industry is still finding its
events or riser gas – whenever they might arise. Typical equip- path forward on active pressure management techniques and
ment includes a rotating control device (RCD) to keep the well technologies. To date, MPD has been a discrete process used in
closed while diverting annular fluids out of the well; Microflux, response to specific challenges, such as drilling within narrow
an MPD control system used to detect and control minute down- pore pressure-fracture gradient windows. But the closed-loop cir-
hole influxes and losses; a Coriolis mass-flow meter to capture culating system that enables MPD facilitates many applications
mass and volume flow, mud weight/fluid density and tempera- for understanding and affecting wellbore pressure. Among them
ture from returning annular fluids; hydraulic power units; and are well control, pressure management, riser gas handling, mud
associated valves and hoses. An intelligent control unit and data optimization, ROP enhancement, dynamic formation integrity
acquisition system ties everything together by analyzing the sys- testing, and cementing, to name just a few. Whether and to what
tem data, pinpointing the source and cause of a fluid influx or extent operators, drilling contractors, service firms and OEMs
loss and transmitting the information to operation centers on optimize that path forward by finding common ground on the
location and onshore. design and desirability of these systems is the next big question
NOV says that its MPowerD systems combine MPD in offshore drilling and completion. •

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DRILLING & COMPLETION 

Artificial intelligence improves


real-time drilling data analysis
OLE EVENSEN, ØYSTEIN HAALAND, IBM

WELL DELIVERY may be the mother


of all exploration processes. Since Col-
onel Drake’s first commercial oil well in
Pennsylvania 150 years ago, drilling has
been one of the most critical and costly
exploration and production activities.
Today, artificial intelligence (AI) is mak-
ing a difference in a discipline looking
for major improvement.
During the last decades there have
been major changes in well require-
ments and drilling capabilities.
Increased depth, directional drilling,
extended lengths and higher pressure
The AI training of the system allows Woodside users to leverage everything reported
and temperature are some aspects in offset wells for immediate, accurate, and comprehensive insight with the purpose of
changing the game. While new capabil- identifying geohazards. (All images courtesy IBM)
ities allow us to realize more ambitious
well objectives, we also face new chal- AI will be pivotal in leveraging both historical and new Big Data for improved
lenges. More sophisticated rigs, control decision-making.
systems and operating models call for
better collaboration with more, timely TYPES OF AI-SUPPORTED ANALYTICS
and shared insight during operations. AI is a term used to cover different types of analytics. Two relevant types relevant
An exploration well is a major cap- for well delivery are natural language understanding (NLU) and machine learning
ital investment with financial, opera- (ML). The first type may be more intuitive as AI is used to read documents, writ-
tional, and reputational risks. According ten by people for other people to read – as if the AI system was an expert. A good
to Rystad Energy’s Global Well Report well delivery example is Woodside’s “Watson for Drilling,” initially referred to as
– Q3 2018, more than 73,000 wells are Geohazard Advisor.
expected to be drilled and completed Using NLU to read data from completed wells, the well delivery team can select
during 2019. While most of the wells an area of interest on a GIS map interface, and immediately get all relevant infor-
are onshore, more than 2,400 are off- mation from wells within their target area.
shore wells - all increasing in complexity Throughout the planning phase much of the critical data is “unstructured” –
and length. While Colonel Drake’s first such as end-of-well reports, completion reports, and semi-structured daily drilling
well was about 21 m (69 ft), the average reports. The NLU aspires to extract the information within the text, as a domain
length across all well types will be about expert would do. The Woodside solution understands key concepts described in
3,200 m (10,499 ft) in 2019. reports without requiring specific keywords to be present. For example, a reference
All the above is contributing to the to a sudden influx of fluids and an action to increase the gravity of mud is “inferred”
complexity and consequences of the to describe the occurrence of a kick. The AI training of the system allows Wood-
continuous decision-making, from side users to leverage everything reported in offset wells for immediate, accurate,
“request to drill” until the well is com- and comprehensive insight with the purpose of identifying geohazards relevant for
pleted. Each decision will influence the their project. The benefit is risk management, improved quality and efficiency. A
well outcome, risk, time, and cost. The Woodside executive said: “We used to spend 80% of our time looking for data and
increasing volumes of data available only 20% using it.” New technology allows domain experts to train the system, and
from historical wells as well as from users to give feedback, as opposed to previous programmatic approaches.
more “sensorized” drilling equipment A different AI concept of machine learning becomes more interesting during a
allows for new insight but necessi- drilling operation, where the continuously streaming data is structured, from drill
tates new decision support technology. rig to downhole sensors and logging. Machine learning allows for new ways to learn

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 DRILLING & COMPLETION

from this data, as a recent example from Maersk Oil (now Total) will illustrate. nobody had been aware of…”

AI APPLIED TO REAL-TIME PREDICTIVE DRILLING ANALYTICS AI COMPLEMENTING


The (Maersk Oil) Total team explained their challenge as “significant NPT events TRADITIONAL FIRST PRINCIPLE
and performance variability” which experience alone would not be enough to MODELS
remedy. The well delivery team worked closely with an IBM industry team, led by Today first principle models, building
Deb Chakraborty and supported by data scientists, geophysics and geologists with on established science of physics, are
well delivery project experience. The project ambition was to explore how AI could widely used to predict critical events
provide improved warning time to critical situations by analyzing real-time data in the active drilling phase, and they
coming from the drilling operation, leveraging good practices from predictive ini- should continue to be so. Their strength
tiatives in other industries. is their ability to execute as anticipated
The analytics approach was to start exploring data from previously completed “anywhere” – as rules of physics are
well projects. Some had been delivered without incidents while others had expe- universal. Their challenge has been to
rienced NPT (nonproductive time) problems such as stuck pipe with significant detect the weak signals that may not
delay and additional cost. be obvious when analyzing only spe-
Data scientists used AI algorithms in the IBM SPSS Statistics and Watson Stu- cific “physical relationships” in data.
dio to analyze data selected by the industry experts. The key data was all recorded This is the opportunity space for AI to
channels, from wellbore to drill rig, ahead of observed events, such as a stuck pipe. complement.
The objective was to identify changes in data that could indicate that a “precur- Applying AI without any bias to data
sor” (e.g.: pack-off ) to an event was developing. sources and relationships, in a data-
driven modeling approach, has enabled
significantly increased precision and
lead-time of predictions. However, AI
has historically had a challenge with
deploying models outside areas where
they were “trained.” While AI mod-
els may be 80% “ready to move,” some
adaptation is required to ensure a sat-
isfactory level of precision and recall
for events it is scouting for. A new drill
site will introduce different formation
and geomechanics. Additionally, new
well plans and rig parameters must be
When a possible data pattern link emerged – like a “fingerprint” ahead of a non-desired
situation, it would be tested on other data sets for verification.
tuned into the AI model. Finally, as drill-
ing commences, new streaming data
The teams consulted the clients drilling engineers to understand if any “pat- and observations will allow for final
terns detected” in the data could be linked to observations recorded by the drill- calibration of the model.
ing team during the time leading up to an incident. When a possible data pattern The data-driven approach is also
link emerged – like a “fingerprint” ahead of a non-desired situation, it would be capable of identifying new “signatures”
tested on other data sets for verification. or “fingerprints” as it builds an under-
This “supervised learning” approach is ideal when there is limited data sets for standing of what constitutes normal
training. The amount of data from each well may be considered large, but there is behavior. When a new signature is iden-
usually not many delivered well projects with complete and quality data available tified, the subject matter expects can
for a more brute-force (unsupervised) analysis. Several data science approaches, “relate” the findings to available data,
applying different algorithms on direct or “derived” variables, were pursued to replaying data and looking at drilling
detect possible weak-signals of significance. reports for observations of the event
The proof of the concept was judged by the models’ ability to successfully detect taking place. This approach of “super-
precursors and events within “blind-data sets,” which are completed wells not vised learning” extends the hybrid
made available during training. The proof was declared positive when Joy Oyovw- model capabilities and improves the
evotu, the Total Lead Drilling Engineer, said: “The predictions gives the operating prediction levels.
team sufficient warning time to take actions to avoid events.” The AI approach also
complemented physics models in ways not anticipated. As IBM’s industry expert, THE NEXT FRONTIERS
Stephen Lord, said after the successful well delivery pilot had been completed, Today we are working with “Narrow
“They expected to see early notification of known events, but they were equally AI,” meaning that the focus is on ver-
impressed to see how close they had been to potential high-impact events which tical capabilities. In the well delivery

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DRILLING & COMPLETION •

as being “open” should be a given require-


ment for all technology applied. •

THE AUTHORS
Ole Evensen, Global Upstream Strategy
Leader within IBM Chemicals & Petro-
leum, has served the oil and gas industry
for more than 25 years. As Consulting Part-
ner, he facilitated E&P process improve-
ment and provided strategic advice for
developing new organizational capabili-
ties. He is currently helping operators to
explore and introduce new AI technol-
ogy to address business challenges and
“Providing time to react” outlines how previous challenges of deploying AI models
opportunities.
in new regions has been overcome by template supported preparation and rapid
stepwise calibration. Øystein Haaland is CTO and Distin-
guished Engineer within IBM Chemicals & Petroleum. He
world, we may consider the next step toward “Broader AI” has served the oil and gas industry for more than 25 years,
will be to include more disciplines and combine more avail- developing new industry solutions in collaboration with
able data from new higher-fidelity sensors and unexplored R&D and international operators. Haaland is participating
sources. It may include seismic, logs, rock properties – and in industry standardization initiatives and developing tech-
more unstructured data sources, such as documents used in nology accelerators to enable digital transformation.
the Woodside example.
AI will continue to complement existing first principle ana-
lytics models but will also bring the promise to help extract
knowledge from previous projects. Advising your “next best
action” will require natural (drilling domain) language under-
standing to help organizations improve processes and lever-
age knowledge for a competitive advantage.
We can also envision the opportunity to fuel digital twin
models with real-time integrity data and deep analytical
models to better assess the overall status of the drill rig, and
systems. Examples may be corrosion, mooring and anchor-
ing issues, and weather. Our next big goal should be to use all
this structured and un-structured data to embed AI and deep
learning analysis into the end to end well delivery processes.
A digital twin vision could go beyond the physical facilities, “I can think of no one better to translate the complexities of
to include the digital reservoir and even overburden. natural gas liquids into a more easily understandable subject.”
Pursuing such opportunities will require an open “systems — Frank H. Richardson, President and CEO, Shell Oil Company, Retired
architecture” to support a services-oriented model. Compet- Natural Gas Liquids: A Nontechnical Guide
itive advantages will not come from your access to technol- is a comprehensive overview of NGLs from
ogy, but your ability to use it, and integrate data and services production in the oil patch to consumption in
from involved partners. Looking beyond AI, technology such the fuels and petrochemicals industries.
as Blockchain is enabling new ways of working. Blockchain is Learn what is behind natural gas liquids:
already explored as an enabling technology to develop new • How they are produced
well delivery collaboration models that protects participants • How they are transported
different business models, data and competitive differentia- • How they are consumed in the fuels
tors. The technology allows data to be collectively used while and petrochemicals industry
individually protected and owned in accordance with “smart • Profles of successful NGL companies
contracts.” This will not only help the industry to improve pro-
cesses but also may allow for new service providers, offering
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190 79
190

2019 THE GULF OF MEXICOWilliamson 79 Milam 21 Allen


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