David Paganie • Houston
With the official moratorium deadline still looming, many Gulf of Mexico operators are reluctant to announce, at least publicly, plans for drilling and production. Shell, on the other hand, is not letting the ban stop it from taking a final investment decision on a new tension leg platform. Announced last month, the 100,000-boe/d TLP will be installed on the Mars B field. The operator says its outlook for the GoM deepwater remains positive.
Apache Corp., a new entrant in the GoM deepwater play, echoed Shell’s optimistic outlook at a recent event in Houston. Carl Scharpf, Gulf Coast Exploration & New Ventures, said the deepwater GoM remains a promising exploration venue. The company marked its entry with the $3.9-billion merger agreement with Mariner Energy announced earlier this year.
On the shelf, McMoRan continues to validate its “deep gas” and “ultra deep” models, which have been confirmed by the Flatrock, Davy Jones, and Blackbeard West discoveries, respectively, said CEO James R. (Jim Bob) Moffett, in an interview with Eldon Ball,Offshore’s senior editor, technology & economics. “Our geologic models for the ‘ultra deep’ targets indicate the potential for large accumulations of hydrocarbons, comparable in size to discoveries in the GoM deepwater in recent years,” Moffett said.
The full interview including details of McMoRan’s shelf strategy begins on page 62.
Meanwhile, the Gulf of Mexico decommissioning market received good news last month. Effective Oct. 15, operators will need to expedite the removal of idle infrastructure in the GoM, which should lead to increasing levels of specialized services and equipment required for abandonment work.
On Sept. 15, the Bureau of Ocean Energy, Management, and Regulation (BOEMRE) issued new guidelines in the form of a Notice to Lessees and Operators and Pipeline Right-of-way Holders (NTL). The document is not a new regulation. The purpose of the NTL, as stated, is to “establish guidelines that provide a consistent and systematic approach to determine the future utility of idle infrastructure on active leases and to ensure that all wells, structures, and pipelines on terminated leases and pipelines on terminated pipeline rights-of-way are decommissioned within the time frames established by regulations, conditions of approval, and lease instruments.”
The NTL mandates two significant revisions from previous requirements:
1. The time frame in which idle wells and platforms must be removed has changed
2. The system boundaries for performance have changed from the leasehold level to the well and structural level.
According to the new NTL, if a well has not produced for five years or more, it must be permanently or temporarily abandoned within three years. Alternatively, the operator may opt to zone isolate the wellbore, which adds an additional two-year window to plug the well.
For a structure, if it has not produced for five years or more, the NTL requires it to be removed within five years.
Mark Kaiser, professor and director of research and development at the Center for Energy Studies, Louisiana State University, figures $1.4-$3.5 billion will be required to comply with the new guidelines. Last year, decommissioning levels reached a historic high, according to Kaiser. Estimated capex of $650,000-$1.4 billion (assuming conventional removals) was spent for 835 plug and abandonments, 744 temporary abandonments, and 214 structural removals.
According to Kaiser’s statistics, in shallow water (<500 ft) there are 3,273 wells that have been idle for five years or more and 833 wells have never produced. In deepwater (>500 ft), 113 wells have been idle for five years or more and 216 wells have never produced. Kaiser also details the range of liability exposure for the companies that own these wells. The top two are Chevron and Apache, both of which are exposed to an estimated $1-$2.5 billion in liability. The companies own about 700 and 450 of the wells, respectively. Rounding out the top five are W&T Offshore, Stone Energy, and Mariner Energy.While uncertainty continues to persistent in the wake of the Macondo incident, optimism is prevalent in the Gulf region and there are signs of a potential increase in workforce utilization.
Log on towww.offshore-mag.com for the audio and slides of Mark Kaiser’s recent webcast presentation on the outlook of decommissioning in the GoM.
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