MMS approves FPSO
Petrobras has confirmed that the MMS approved its conceptual plan for the development of the Cascade and Chinook fields. According to Petrobras, this is the first approval at this level in the regulatory process for a plan that includes the deployment of an FPSO in the US Gulf of Mexico.
The company will take a fast-track development approach toward scheduled first production in 2009. In the first phase, the plan calls for the installation and operation of an FPSO in 2,499 m (8,200 ft) of water, with two subsea wells tied back from Cascasde (Walker Ridge block 206) and one from Chinook (Walker Ridge block 469), each drilled to 8,230 m (27,000 ft) TD. Oil production will be offloaded to tankers, and gas will be piped to shore. The development plans could be expanded to include additional wells from both fields pending reservoir performance.
Petrobras says it has proposed the use of six new technologies in the development plan, all of which are new to the US GoM. They include an FPSO with a disconnectable turret buoy, crude transportation via shuttle tanker, free-standing hybrid risers, subsea electric pumps, torpedo piles, and polyester anchoring lines.
Detailed engineering studies are under way, including the preparation of a Deepwater Operations Plan, which must be approved by the MMS.
Petrobras has more than 25 years’ experience in FPSO operations off Brazil, with 15 units in operation and another nine under construction and scheduled for deployment in the area.
Petrobras operates of Cascade and Chinook with 50% and 66.67%, respectively. Devon Energy holds the remaining 50% of Cascade, and Total E&P USA Inc. holds 33.33% of Chinook.
US Congress approves offshore acreage
The US Congress has approved the US Gulf of Mexico Energy Security Act of 2006 (S.3711), part of a larger tax package (HR.6111), by a vote of 79-9. President Bush signed the plan into law on Dec. 20.
The Senate-approved bill opens access to 8.3 million acres in the Gulf of Mexico, estimated to contain 1.3 Bbbl of oil and 5.8 tcf of gas. Map courtesy of NOIA.
The bill opens access to 8.3 million acres in the GoM, estimated to contain 1.3 Bbbl of oil and 5.8 tcf of gas. The Senate-approved legislation requires the MMS to offer for lease approximately 2.5 million new acres of the 181 Lease Sale Area “as soon as practical,” but no later than one year after the bill is signed. Officials also must offer approximately 5.8 million new acres in the 181 South Lease Sale Area “as soon as practical” after enactment.
The measure maintains a moratorium on leasing in areas east of the military mission line, acreage in the Eastern Planning Area within 201 km (125 mi) of the Florida coast, and specified areas within the Central Planning Area within 161 km (100 mi) of Florida. This no-drill buffer will last until June 30, 2022.
Additionally, the leasing provisions will allocate 37.5% of production royalties to Gulf Coast producing states, 12.5% to the Land and Water Conservation Fund, and 50% to the federal treasury.
Senator Mary Landrieu (D-La) has estimated that the new legislation will provide $30 billion to the state of Louisiana over the next 30 years.
Deepwater Millennium sets world records
Transocean’s drillshipDeepwater Millennium set four world water-depth records for completion operations in the US Gulf of Mexico in 2006. The latest record was set with completion of the Anadarko-operated Cheyenne well No. 2 in Lloyd Ridge block 399 in 2,713 m (8,960 ft) of water.
According to Transocean, this record is over 305 m (1,000 ft) deeper than the current water depth record for a producing well in the GoM, which is in 2,307 m (7,570 ft) of water.
Previous completion records set by the drillship include Vortex with Atwater Valley block 261 well No. 1 in 2,543 m (8,344ft) of water, Merganser with Atwater Valley block 37 wells No. 1 and No. 3 in 2,418 m (7,933 ft) and 2,415 m (7,919 ft) of water, respectively. All wells will be tied back to the Anadarko-operatedIndependence Hub semisubmersible production facility.
Also, in 2006, theMillennium was the first drillship to use the LARS (Launch and Recovery System) subsea tree intervention workover control system in record water depths on the aforementioned wells.
Western Lease Sale nets $332 million
The MMS has accepted high bids totaling $331.9 million and awarded 371 leases in Western Gulf of Mexico Oil and Gas Lease Sale 200. The leases were awarded following the completion of a two-phase bid evaluation process.
A total of 381 tracts received bids at the lease sale held on Aug. 16, 2006. Sixty-two companies submitted 561 bids. The total value for high bids on all 381 tracts was $340.9 million. The MMS rejected bids worth $9 million on 10 tracts determined as insufficient for fair market value, resulting in the total of $332 million on 371 tracts.
The highest bid accepted was $21 million from BP E&P Inc. for Keathley Canyon block 58 in 800-1,600 m (2,626-5,249 ft) of water. The block received four bids.
The second highest bid accepted was $12.8 million from Petrobras America Inc. for Keathley Canyon block 59 in 800-1,600 m (2,626-5,249 ft) of water. The third highest bid accepted was $10.8 also from Petrobras America Inc. for Keathley Canyon block 147 in 800-1,600 m (2,626-5,249 ft) of water. Petrobras had the highest number of bids accepted (34) worth $45.5 million. Hess, BP, Shell, and Kerr-McGee rounded out the top five high bidders.
Disconnectable FPSO has advantages
SBM and FMC shared an optimistic outlook at the Deep Offshore Technology Conference in Houston for the use of disconnectable turret moored FPSOs in the deepwater Gulf of Mexico.
The design of the FPSOModec Venture 11 is seen as a viable production solution for the deepwater Gulf of Mexico. The unit is fitted with an internal disconnectable turret system designed to protect the personnel and facility from imminent cyclones. The FPSO is installed on the Santos-operated Mutineer/Exeter field in 156 m (512 ft) of water off northwest Australia. Photo courtesy of Modec.
Yong Lou with SBM Imodco Inc. said that the No. 1 benefit of using this type of floating production facility in the Gulf is to avoid damage from hurricanes. Such a vessel could disconnect from its turret in as little as 15 min, said Lou. A typical planned disconnection takes around 6 hr.
The disconnectable FPSO solution is proven in regions with similar harsh weather conditions, such as off northwest Australia and in the South China Sea, he said.
The turret is the key component for the disconnection mechanism, Lou explained. He pointed to two types of turret configurations that would be ideal for the Gulf - buoy turret mooring and riser turret mooring. Polyester rope would be used with the system as well.
Lou concluded with four advantages of using a disconnectable FPSO in the GoM vs. a DP solution: lower capex, reduced operating cost, higher reliability, and no need for riser QC/DC (quick connect disconnect) couplings.
Arun Duggal with FMC Technologies Floating Systems Inc. shared a similar opinion about the use of disconnectable FPSOs in the GoM.
Disconnectable turret technology with FPSOs has been used successfully in the areas pointed out by Lou since the 1980s, said Duggal. The FPSO operating on the Santos-operated Mutineer/Exeter field off northwest Australia was disconnected five times in 2006 to avoid cyclones.
One of the major challenges in using this technology in the Gulf is that it will be required for deepwater, Duggal said. This solution is typically used in water depths of less than 200 m (656 ft).
However, we can learn from the BHP-operatedStybarrow FPSO, which is being installed in 800 m (2,625 ft) of water off northwest Australia, he added.
US collecting on royalties
Assistant Secretary of Land and Minerals Management Stephen Allred has signed agreements with BP, ConocoPhillips, Marathon Oil Co., Shell, and Walter Oil and Gas Corp. addressing deepwater leases issued in 1998 and 1999. Under the agreements, the companies will pay royalties on oil and gas produced from leases issued in 1998 to 1999. Revenue will be received from production starting on Oct. 1, 2006.
“We encourage the remaining companies that have not yet agreed to sign to join us in resolving this issue,” Allred says.
Deepwater leases issued during this time included a royalty incentive to encourage companies to explore in areas where the costs were high. The incentive allowed companies to produce a set volume of oil and gas before paying royalties. It would not apply if market prices exceeded a certain threshold. However, for leases issued in 1998 and 1999, a price threshold was omitted, and as a result, companies have not been required to pay royalties until all of the incentive volume was produced even when prices are high. This agreement is expected to remedy the omission for production that occurs on or after Oct. 1, 2006.
Riserless mud recovery
A joint industry project (JIP) has been established to develop and pilot AGR’s riserless mud recovery system in the deep waters of the GoM. Field trials are expected to be performed this year.
The $13 million program is sponsored by BP, Shell, and Demo2000 (the Research Council of Norway).
The riserless mud recovery (RMR) technology has been developed by AGR Subsea, part of Norway-based Ability Group ASA, as a means of re-circulating and re-using drilling fluids. Benefits of the technology include cost savings from reduced operating time and less environmental impact from avoided discharges in the water.
RMR, introduced in 2004, has been used on more than 25 wells in the Caspian, offshore Sakhalin Island, the Barents Sea, and in the North Sea, and has been deployed in water depths of 400 m (1,312 ft) deep.
Under the JIP, AGR Subsea is working with BP and Shell to make the technology operational in water depths to 1,500 m (4,921 ft). Field trials at these depths are planned for the GoM this year.
David Paganie, Houston
