INTERNATIONAL FOCUS

Gravity-based platforms pose a major removal problem.

• Crude Oil's Collapse - West Texas Intermediate Oil Price: Jan 2, 1997 to Jan 8, 1998 [14,542 bytes]

Brent spar easy - what about condeeps?

Now that the disposition of the Brent Spar is settled (see article on page 131), it behooves the industry to consider the real challenge: removing the large gravity-based structures installed in the North Sea. Floating steel tubes like the spar are simple: release chains, tow to shore, lift and slice. Disposing of a gravity-based platform is much more complicated, especially if it was installed in relatively deep water.

• The platform bases have been subjected to compression for decades with wave and current forces flexing them. What happens when the forces are relieved?
• They were built to be towed vertically. What are their towing characteristics after all this time in the sea?
• The structures are made of concrete and steel rebar. What applications are there for reuse?

The process of removal involves cleaning and topsides separation. Next, the base must be inspected and checked for integrity before deballasting. If needed, internal supports must be built and installed. Lastly comes the most complicated manuever - refloating.

The seabed around the structure must be fluidized to release the base from the mud. Balancing the forces of gravity, hydrologic head, internal/external pressures, and the structure's altered strain tolerance will require major modeling. Despite re-pressurizing the seabed inside the skirts, there will be differential pockets. Can the structure be rocked to equalize pressure and assist breakout? Will it release all at once?

An interesting issue is the amount of suction developed as the gravity base lifts off the seafloor and rises toward the surface. Anything on the seafloor or water column nearby will be drawn under the structure. Also, what happens if a cell fails and implodes on ascent, or while being towed? How will the structure be controlled and stabilized? What happens if implosion limits the compartmentation available for re-ballasting or if the structure settles into position at an unplanned location? At minimum, the addition of buoyancy would be difficult.

Cheap crude oil or cheap trades?

Often, the way a situation is examined sets limits to viewing the future. Matthew Simmons, President of Simmons & Co., International, examines the industry from a raw numbers viewpoint. His conclusions flow from the patterns and relationships they reveal.

In a recent industry meeting he demonstrated a relationship between the NYMEX forward contract and the delivered price per barrel of West Texas Intermediate (WTI) crude. In a normal world, a 30-day forward contract price should be different from the current-day delivered cash price.

Simmons found that over the last year these two very different prices have been the same most of the time. Over the last year, oil prices ranged from a high of over $26/bbl in January 1997 to a low of $16.50/bbl in mid-January 1998. He found that high-volume speculative trading by 5-10% of the commodity firms created a near 1:1 price-link between the paper barrel and the real barrel, effectively setting the world oil price.

He says the firms are trading on their internal perceptions, not on real-world facts. They rely too heavily on International Energy Agency (IEA) oil demand data that he considers fundamentally flawed.

Simmons takes the IEA to task for faulty production estimates that do not account for depletion. The predicted 1997 non-OPEC production rise did not occur. OPEC used about half of its excess capacity to meet the rising demand. Non-OPEC production was up only 2.8% for 1997, while depletion rose to over 4% last year. The total need for new production is around 4.5 million b/d of crude.

This places the downward price trend in proper context. It is a short-term financial aberration. The underlying fundamentals of growing demand and accelerating depletion have not changed. Even a slowing of growth in Southeast Asia's demand will not significantly affect the need for more production. According to Simmons, Southeast Asia (South Korea, Malaysia, Philippines, Indonesia and Thailand) accounts for only 7% of world crude consumption. Demand growth in the region may slow but is unlikely to fall significantly.

Simmons observes that the offshore industry is operating at capacity and needs to shift to growth to service the expanding number of deepwater systems. Drilling of new wells, designing and setting of subsea systems, servicing existing wellheads, pipeline systems and related logistical support all need immediate expansion. The demand growth is real. The industry needs to service the boom by increasing supply, finding the necessary people and investing appropriately. Otherwise, demand will explode into another major crisis for the world economy, he claims.

Petrotrin offers JV blocks

Petroleum Company of Trinidad and Tobago Limited announced an open bidding round for four joint venture blocks, two onshore and two offshore. The two offshore blocks, South Marine and Brighton Marine, are adjacent to the southern coast in shallow water. Data packages are available for each block: $15,000 and $450,000, respectively. A 3-D seismic bay cable survey over a marginal field is available for the Brighton Marine block. Inquires should be directed to Mr. Wilson Lalla, Exploration Manager, Petrotrin at tel: 868-658-1261 or fax: 868-658-1163.

Bachaquero Field compression underway

Hanover Compressor and Enron commenced operation of the Bachaquero Field compression facility. The facility is located on a platform in Lake Maracaibo, Venezuela and is owned on a 60/40 basis. The facility cost $22.5 million and can compress 100 MMcf/d. Mike McGhan, President and CEO of Hanover Compressor, said "The Bachaquero project dramatically enhances our presence in the region." The compressor station will be operated under a four-year contract with Lagoven.

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