Gene Kliewer
Technology Editor, Subsea & Seismic
Looking into the future, the Asia/Pacific petroleum theater will exert growing influence and impetus on the world upstream scene. With China and India expected to account for the bulk of the world’s demand increase, regional exploration, drilling, and production activity is sure to continue to expand. In addition, the biggest national operators such as Chinese National Offshore Oil Co. and ONGC are exerting influence beyond the region.
Supporting this thesis, Infield’s second edition, “Regional Perspectives Asia Pacific Market Update Report 2009/13,” forecasts regional offshore capex to increase 77%, reaching an estimate of at least $97 billion. With this in mind, let us take a look at some of the regional hot spots for oil and gas activity.
Australia
The big news coming out of Australia, and indeed the whole Pacific arena, for the last several months involves gas developments off the western coast. The Greater Gorgon Project involves several distinct production plays. Among the plans is development of the Greater Gorgon gas fields, beginning with the Gorgon and Jansz-Io fields with development facilities installed directly on the ocean floor in water up to 1,300 m (4,265 ft) deep. Two subsea pipelines with a combined length of 240 km (149 mi) will carry the gas to facilities on Barrow Island. Construction of a 15 million metric tons per year LNG facility is under way on the island.
Chevron will operate Gorgon with a 47% stake; Shell and ExxonMobil each hold 25%, Osaka Gas has 1.25%, Tokyo Gas a 1% interest, and Chubu Electric Power Co. has 0.417%.
Map courtesy Chevron.
Chevron also is taking the lead on another such project, Wheatstone. Apache Corp. (13%) and Kuwait Foreign Petroleum Exploration Co. (7%) have signed to become equity participants in Wheatstone. The first two LNG trains will be supplied with gas from the Chevron operated Wheatstone and Iago fields. Apache and KUFPEC will bring gas to Wheatstone from their Julimar and Brunello fields.
Chevron Australia has awarded Technip a front-end engineering design contract for the Wheatstone project’s offshore processing platform.
The upstream portion of the project comprises development of gas fields in the WA-17-R and WA-253-P permits in water depths of 70 m to 200 m (230 ft to 656 ft). Subsea gas gathering systems will transport production to the processing platform where gas and condensate will be dehydrated, dewatered, compressed, and exported through a 200-km (124-mi) export pipeline to the onshore gas plant.
Elsewhere off Western Australia, the Browse floating LNG production project is taking shape. Woodside Energy Ltd., as operator, proposes to develop the Torosa, Brecknock, and Calliance gas fields, all in the Browse basin approximately 425 km (264 mi) north of Broome, Western Australia.
With Woodside setting mid-2012 as the final investment decision, other participants are BHP Billiton (North West Shelf) Pty. Ltd., BP Developments Australia Pty. Ltd., Chevron Australia Pty. Ltd., and Shell Development Australia Pty. Ltd.
Most recently, Woodside has awarded Fluor Corp. the front-end engineering and design work for the Browse basin LNG development offshore Western Australia.
Fluor will address the central gas processing facility including steel jackets, compression platform, and utilities accommodation platform. Fluor has teamed with McDermott International Inc. on the steel jackets and float-over installation.
Fluor’s work is one part of the overall Browse LNG Development that includes three TLPs, a central processing facility, more than 1,200 km (745 mi) of subsea pipeline infrastructure, and an onshore three-train LNG.
China
Exploration and production efforts offshore China are picking up and more players are entering the arena. BG Group has a deepwater gas discovery on block 64/11 in the South China Sea, for example. The Lingshui 22-1-1 well on block 64/11, drilled in the Qiongdongnan basin, encountered gas-bearing sands.
And, Husky Energy has a second successful appraisal well at its Liuhua 29-1 gas discovery, also in the South China Sea. Husky and the China National Offshore Oil Co. (CNOOC) has agreed to work together to develop the Liwan-1 gas field. In the East Natuna block, Pertamina and ExxonMobil have agreed to co-develop production, possibly with other partners.
CNOOC has approved the investment and development plan for three oil fields in block 22/1 of the Beibu Gulf. The $300-million plan, if finalized, covers drilling 11 development wells and potentially three to four exploration wells targeting potential reserves of 20 to 40 MMbbl from two unmanned well head platforms at the 6.12 South and 12.8 West oil fields.
These platforms will be connected by pipelines to a new processing platform, adjacent to CNOOC’s 12.1.1 platform. The project will have access to 20,000 b/d of oil processing capacity from which oil will be transported through CNOOC’s 16-in. pipeline 32 km (20 mi) to storage and export terminal at Wenzhou Island. Engineering design work and bidding for long lead equipment has begun and first oil production is expected before year-end 2012.
The participants in the development of the 6.12, 6.12 South, and 12.8 West oil fields are CNOOC Ltd (operator) with 51%, Roc Oil (China) Co. with 19.60%, Horizon Oil (Beibu) Ltd with 14.7% Petsec Energy Ltd at 12.25%, and Oil Australia Pty Ltd (Majuko Corp.) the remaining 2.45%.
CNOOC has started production from two shallow water oil fields in Bohai Bay, offshore China. BoZhong 26-3, in the central sector, has been developed by four wells tied into nearby facilities. LuDa 32-2, in the eastern part of Bohai Bay, was developed jointly with the LD27-2 field. Both the new fields should deliver over 6,000 b/d at peak in 2011.
An interesting project is scheduled to start in 3Q 2011. Halliburton has contracts to provide equipment and services for the first ultra-high-pressure/high-temperature (HP/HT) oil and gas drilling project in Asia. The contracts call for the industry’s first MWD/LWD sensors rated to 230°C (446°F) and 25,000 psi (172.37 MPa), as well as the industry’s first multi-cycle DST tools rated to 260°C (500°F).
India
If ONGC’s drilling plans are to be met, India may soak up some more of the available drilling rigs. In an effort to get in front of what is expected to be a run-up in demand, India’s Oil and Natural Gas Corp. Ltd. is active not only offshore India, but at Sakhalin-1, BC-10 in Brazil, Venezuela, as well as Africa and the Middle East.
At home, ONGC has won 10 of 33 available lease blocks in NELP-IX. Reports say ONGC and partners got five out of the eight deepwater blocks on offer. Reliance got two and BG-BHP one. While six out of seven blocks got bids, ONGC and partners managed five of them. OIL as operator got the sixth.
Asia/Pacific leads in rig, vessel construction
No report about the petroleum activity in the Asia/Pacific region is complete without a glance at the offshore drilling rig and supply and service vessel construction under way in Asia. A quick count over the last few months found almost 30 construction projects ranging from platform supply vessels to pipelay vessels, FPSO conversions, jackup newbuilds, and various MODUs.
Yards and companies involved in supplying these pieces of equipment include Keppel, Jurong, Samsung, Hyundai, COSCO, Daewoo, PPL, and Sembcorp. Based on that list, the sites involved range from Singapore to China.
This volume also indicates long-term optimism on the part of drilling contractors and service companies to commit to such a volume of construction with its attendant capex reaching well into the $100 millions or more range, per unit.
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