Jeremy Beckman • London
Drilling, FPSOs set for steady revival
Offshore drilling activity worldwide should stabilize this year following a steep decline in 2009, according to a report by analysts Datamonitor. However, a return to growth is unlikely before 2011.
Last year’s dip was attributed to delays in both shallow and deepwater projects and flagging energy demand. Prospects in the mid-term look much brighter, with the authors predicting over 20,000 wells globally during 2010-14, a 12% increase over the previous five years, leading to overall expenditure of $387 billion.
Asia (outside the Middle East) has attracted the highest volume of drilling spending since 2005, the authors add, and this trend will continue. Over North America, well numbers should rise by 7% during 2010-14 following exceptional lows last year. Africa has overtaken Western Europe to climb to number three in terms of well expenditure, and should experience further growth in deepwater spending.
Other boom areas could be Eastern Europe/Former Soviet Union, and the Middle East, where Datamonitor forecasts respective 55% and 40% rises in well numbers.
The stage also is set for the FPSO market to recover, according to the latest Infield Systems’ Global Perspective on the sector. Following record activity in 2004-08, no new FPSO awards were issued anywhere last year, Infield says. But stronger long-term market fundamentals suggest a pick-up in demand through 2014, it believes, much of this centered on the deepwater Brazilian and West African plays.
Among the trends Infield has identified are the emergence of cylindrical floaters with added drilling capabilities, and greater FPSO availability, with numerous contracted units due to leave their current fields within the next five years.
Americas
Petrobras has discovered two oil accumulations via a single well in the Campos basin. Well 6-BR-63A-RJS was drilled in the Barracuda concession, 100 km (62 mi) off the state of Rio de Janeiro, in a water depth of 860 m (2,821 ft). One of the finds came in pre-salt carbonatic reservoirs, the other in sandy, post-salt reservoirs. The combined oil volumes, estimated at 65 MMbbl, could be tied into theP-43 platform on the Barracuda field.
Another Petrobras exploratory effort, drilled 6 km (3.7 mi) from the PPM-1 platform, looks to have uncovered 25 MMbbl of recoverable oil in Albian calcareous rocks. More importantly, it has opened a new exploratory front in the Campos basin east of the Pampo and Bicudo concessions.
Despite protests from Argentina, the Diamond Offshore semisubOcean Guardian started drilling the Liz prospect in the North Falklands basin in February for London-based operator Desire Petroleum. This was the first new well in the area since 1998. BHP Billiton/Falklands Oil and Gas also have taken one of the rig’s spare slots to drill its Toroa prospect, the first-ever well south of the islands in the East Falklands basin.
Jurong Shipyard has acquired land in Brazil’s Aracruz municipality to build a new yard, close to the emerging offshore Espirito Santo basin. When completed, the facility will be equipped for construction of drillships, semisubmersibles, FPSOs, and platform supply vessels, plus topsides fabrication and rig/ship repairs.
A consortium of Petrobras, YPF, and Petrogal (Galp Energia) are set to explore two blocks in Uruguay’s Punta del Este basin. Under an agreement with state oil company Ancap, YPF will operate block 3,300 km (186 mi) offshore in water depths of 200-1,500 m (656-4,921 ft). Petrobras will take the lead role in block 4, 150 km (93 mi) off the coast in waters 100-200 m (328-656 ft) deep. Over the next four years, the companies are committed to acquiring and evaluating seismic data before determining whether to drill.
Africa
Mozambique has its first deepwater gas discovery, drilled by theBelford Dolphin drillship on the Windjammer prospect in 4,800 ft (1,463 m) of water, 30 km (18.6 mi) offshore. According to operator Anadarko, the well in the Rovuma basin encountered over 480 net ft (146 m) of natural gas pay in high quality reservoir sands, with a gross column of over 1,200 ft (366 m). This setting was the first of seven play types Anadarko has identified in its acreage. Next up, the drillship will transfer 50 mi (80.5 km) to the southeast to drill the Collier structure. Depending on the results, Anadarko could commit for two to four more exploratory wells in the basin later this year.
Eni has added two new oil finds to its tally in Angola’s deepwater block 15/06. The Nzanza-1 and Cinguvu-1 wells, drilled 350 km (217 mi) northwest of Luanda in 1,400 m (4,593 ft) water depth, flowed a cumulative 8,000 b/d during production tests. Previous discoveries in the concession are Cabaca Norte, Sangos, and Ngoma. Further exploration will follow later this year.
Northern Europe
Finland has issued the last outstanding permit for the 1,223-km (760-mi) Nord Stream pipelines through the Baltic Sea. Russia, Sweden, Denmark, and Germany already had issued consents for the route traversing their territorial waters. This paves the way for Saipem to start construction of the lines which will take over 20 bcm/yr (706 bcf/yr) of gas from fields in Russia to various countries in central and western Europe.
Mediterranean Sea
Repsol has contracted subsea equipment for two new field developments 50 km (31 mi) off eastern Spain, both of which will be tied back to the Casablanca platform. Aker Subsea, which already was supplying subsea trees for this project, won an order for 12 km (7.4 mi) of steel tube umbilicals, 8 km (4.97 mi) of subsea power cables, a topside control system, and a tie-in/connection system. Technip will supply and install the 11-km (6.8-mi) flexible pipeline system connecting the two production wells to the platform. Both contracts should be completed during the first half of 2011.
GDF Suez has discovered further gas in Egypt’s offshore Nile Delta region, in the West El Burullus concession. The Papyrus-1X well, in 20 m (65.6 ft) water depth, encountered good quality gas-bearing channels sands while drilling a Pliocene prospect. During a drillstem test, the well flowed gas at up to 33 Mcf/d and 442 b/d of condensate. GDF Suez and partner Dana Petroleum will discuss the commerciality of Papyrus and a nearby find with Egyptian gas utility EGAS, with a view to a combined development.
Black Sea
Melrose is planning to explore the Pelican concession in the Romanian offshore sector, pending approval from the government. The company has been negotiating a farm-in to this and the Midia offshore permit, currently operated by Sterling Resources. Melrose is targeting an exploratory well on the Eugenia South oil prospect, formerly named Gasca.
Middle East
Production has started from the Al Khaleej Gas-Phase 2 project offshore Qatar. Joint venture partners Qatar Petroleum and ExxonMobil turned on the taps in December. The new facilities, comprising two wellhead platforms and onshore treatment, liquids recovery, and fractionation plants in Ras Laffan Industrial City, will lift capacity from the field to 2,000 MMcf/d, representing Qatar’s largest source of domestic gas supply.
Iran was due to produce first oil last month from its $300-million Hengam field development in the Persian Gulf. Iran Offshore Oil Co. (IOOC) has developed Hengam via two platforms, with oil exported through a 70-km (43.5 mi) pipeline to Bandar Abbas. Around 30 km (18.6 mi) of the route is underwater, making this Iran’s longest subsea pipeline to date, IOOC says.
According to the country’s Petroenergy Information Network, Shana, China’s CNPC will develop the $4.7-billion Phase 11 of the South Pars gas field, following a preliminary agreement signed with Iran’s government last June. CNPC was first expected to undertake appraisal drilling to evaluate the size of the reserves.
India
ONGC has approved development of the marginal D1 oil field in Mumbai offshore. Development is expected to take 27 months to complete, leading to production of around 36,000 b/d during 2012-13.
Norwegian company Rocksource has been approved as a licensee for Cauvery basin block CY DWN 2001-1, again operated by ONGC. The company hopes to apply its experience with controlled source electromagnetic data techniques to unlock prospectivity on the block.
Asia-Pacific
Husky Oil has a third deepwater gas find in the Pearl River Mouth basin in the East China Sea. Well LH 29-1-1 was drilled northeast of the previous two discoveries in block 29/26, and flowed 57 MMcf/d during drillstem tests. Husky will appraise the field later this year to determine the size of its reserves, which likely will be developed jointly with the other discoveries (LW 3-1 and LH 34-2).
Nido Petroleum has contracted an FSO from Knutsen Shuttletanker Pool for the Tindalo oilfield development in Service Contract 54A offshore the Philippines. Weatherford Asia Pacific will supply production processing equipment, to be installed on the jackupAquamarine Driller. Produced oil from the field will flow from these facilities to the M/T Tove Knutsen FSO via a floating hose system. This arrangement will apply during both initial well testing and normal production operations.
Also off the Philippines, UK-based Forum Energy has been awarded a service contract for the GSEC101 license west of Palawan Island in the South China Sea. The license area is known to be prospective for gas, which Forum believes could be sufficient to justify an LNG scheme.
PTTEP/Petronas has delivered first gas from a project in the Malaysia-Thailand Joint Development Area. Currently the Muda and Jengkla fields, developed under the MTJDA-B17 program, are supplying 135 MMcf/d to the Thai market, scheduled to rise to 335 MMcf/d by year-end, equivalent to 10% of Thailand’s domestic demand. The concession encompasses three blocks in the southern sector of the Gulf of Thailand, 230 km (143 mi) off Songhkla coast and 150 km (93 mi) from Kota Baru City in Malaysia’s Kelantan state.
Offshore Sarawak, MDC Oil and Gas and Petronas have been awarded a production sharing contract for block SK320. The 5,786-sq km (2,234-sq mi) permit is in the central part of the Sarawak basin, in water depths of 100-200 m (328-656 ft), and includes three gas discoveries. MDC, a subsidiary of Abu Dhabi-based Mubadala Development Co., will operate the block. License commitments include acquisition and processing of new 2D and 3D seismic data, and drilling of four exploration wells.
Helix Energy Solutions Group and Clough are teaming to provide subsea services in the Asia-Pacific region. The Clough Helix venture will provide subsea well intervention, well abandonment, subsea production infrastructure installations, diving, inspection, and repair and maintenance.
Australasia
BHP Billiton has produced first oil ahead of schedule from the $1.7-billion Pyrenees project 45 km (27 mi) off the coast of Exmouth, Western Australia. Development involves 13 subsea wells, mostly horizontal, linked to a double-hulled FPSO equipped to handle 96,000 boe/d and with gas injection capacity of 60 MMcf/d. The wells are being drilled and brought onstream in phases, with full production expected later this year. Pyrenees is part of permit WA-42-L in the southern Carnarvon basin, and development encompasses the Crosby, Ravensworth, and Stickle fields in water depths of 169-250 m (555-820 ft).
BHP’s partner Apache Corp. also has produced first oil from its Van Gogh field in permit WA-35-L, 32 mi (53 km) northwest of Exmouth. This is Apache’s first operated development based on an FPSO, in this case theNingaloo Vision. Here the subsea spread includes 19 horizontal lateral producer wells, two water injectors, and one gas injector.
MEO hopes to secure a rig to drill the Artemis gas prospect later this year in Western Australia permit WA-360-P. It estimates prospective resources at 12 tcf in two Jurassic-age reservoirs.
