Global subsea well production will double by year 2002

1,041 trees planned for installation in next five years

Jerry Greenburg
Contributing Editor

The success of large-bore subsea wellheads, such as this Mensa unit being readied for US Gulf of Mexico deployment, are why subsea oil and gas production will double within five years.

The number of subsea wells worldwide could double by the end of 2002 if all of the planned subsea development projects come to fruition. Demand for subsea trees is so high that some subsea tree manufacturers are concerned about having enough capacity to supply the industry with all its equipment needs. The normal lead-time for a subsea tree has increased in the last couple of years - from 8-10 months to 10-12 months today.

About 2 million bbl of oil and 1.3 tcf of gas are produced by subsea production methods each day, says Derrick Booth, owner of Austin, TX-based Subsea Data Services. He adds that forecasts suggest the market will continue to grow at some 10% or more annually until 2020.

Since oil flowed from the first subsea completion installed by Shell in 1961 in the Gulf of Mexico, 1,117 subsea wells have been completed, according to Booth. The industry required 36 years to install the first 1,000 subsea trees, mainly because skeptics believed that subsea wells could not be easily accessed in case of emergency or for remedial work.

The next 1,000 subsea completions will take only about five years, according to Offshore Data Services (ODS). And they are being installed in deeper and deeper waters. According to figures supplied by ODS, a total of 1,041 subsea trees are to be installed during the next five years, including those installed during 1997.

The number of subsea trees scheduled to be set during 1998 is nearly double from 1997. The number of subsea trees scheduled for 1999 drops significantly to 147. However, these figures could increase dramatically due to the present strong deepwater drilling activity in the US Gulf of Mexico and the fact that Brazilian state oil company Petrobras said it would require more than 200 subsea trees during the next five years.

The recent push toward deepwater exploration and utilizing subsea completions as a development tool is evident in the number of trees set in water depths of 1,300 ft and greater. There were 127 trees set in water depths between 650 ft and 1,300 ft, since the first subsea well was completed, according to Subsea Data Services' Subsea-Data-Base. Only 123 trees have been set in water depths of 1,300 ft and greater.

During the next five years, these figures are expected to more than double. ODS' figures show that 582 subsea trees are planned in water depths of 651 ft and greater. This includes 339 trees in water depths of between 651-1,500 ft, and 243 trees in water depths greater than 1,500 ft.

The subsea option is employed across the spectrum of operators, from small independents to the industry giants. And while subsea completions are efficient for deep and ultra-deep waters, it also is very useful for development of satellite wells tied back to an existing platform, early production, and fast-track development schemes.

North Sea

While water depth records are broken in the Gulf of Mexico and off Brazil, the most active area continues to be the North Sea. The North Sea boasts 40% of the subsea trees installed worldwide, according to Subsea-Data-Base. Another 102 subsea development projects are under construction or in the planning stages, according to ODS. These projects will utilize about 600 subsea trees, if all are installed as planned.

The North Sea operator with the most projects, according to ODS, is BP Exploration with 14, calling for about 60 subsea trees. BP Exploration's projects include subsea satellite wells tied back to host platforms on the Schiehallion, Foinaven, and Marnock fields.

The most ambitious projects are offshore Norway, where Norsk Hydro is developing the giant Troll field with more than 100 planned subsea wells tied back to a floating production system in Blocks 31/2 and 31/3. Included in the more than 100 subsea completions for the Troll field are 54 subsea wells in the Troll West Phase III gas project. Production from these wells will flow to six subsea manifolds and then to the FPSO in Block 31/3. The Troll West Phase II oil project will utilize 22 subsea wells tied into five subsea manifolds and then to the FPSO in Block 31/2.

Also, Norsk Hydro is developing the Visund field with as many as 23 subsea completions in about 1,000 ft of water. Kværner is supplying the trees for this field as well as for the Troll field development.

Norwegian state oil company, Statoil, is very active with the Åsgard field development. As many as 60 subsea wells could be completed in about 1,000 ft of water for the Åsgard development. The wells would be tied from several surrounding blocks to the Åsgard FPSO and FPS semisubmersible in Block 6506/11.

Saga Petroleum has several projects ongoing offshore Norway calling for about 16-18 subsea trees. The operator also has possible future plans for Phase II and III of the Snorre field development around the turn of the century and beyond that could require as many as 45 trees.

Brazil

Brazilian state oil company Petrobras is perhaps the most active operator worldwide in terms of the sheer number of subsea completions under construction and planned. The company said it would require more than 200 subsea trees during the next five years.

Petrobras' increased activity is due primarily to its need to commence production on the fields it wants to keep before the government begins offering areas to foreign investment. It's not simply a matter of Petrobras making a discovery. The field must be producing for Petrobras to claim it. Consequently, many of the projects Petrobras is developing are on a fast track.

Many subsea equipment manufacturers are concentrating their marketing efforts to gain a piece of the Petrobras opportunity. For example, Oceaneering subsidiary Multiflex is planning to open an umbilical assembly facility in Brazil to service the growing market.

Earlier this year, Petrobras awarded separate technical cooperation agreements to FMC's Brazilian licensee CBV Industria Mecanica, and Kværner Oilfield Products for development and supply of subsea trees capable of operating in 8,200 ft of water.

The agreements call for development and delivery of six horizontal or side valve trees from each of the two companies. Additional subsea tree manufacturers are also talking with Petrobras regarding similar agreements. Dril-Quip also has developed a horizontal subsea tree, as has ABB Vetco Gray.

Delivery of the first tree from Kværner is set for February 1999 with the five additional trees to be delivered - one each month beginning in April 1999. Design of these trees began in 1996, according to Kværner.

Under CBV Industria Mecanica's agreement, the subsea trees will be manufactured in Brazil with FMC supplying deepwater technology support.

Petrobras is planning development of the Roncador field in about 6,000 ft of water. Nine subsea trees were ordered earlier from Dril-Quip for delivery during 1998, in addition to the six trees to be supplied by Kværner Oilfield Products. The six trees ordered from FMC also may be destined for the Roncador field. As many as 26 trees are planned for the field, including 19 producers and seven injection wells.

Additional Petrobras projects include the Albacora field Phase II in about 1,000 ft of water which will require as many as 35 trees. Suppliers for this field include ABB Vetco Gray, Kværner, CBV and SVC. These manufacturers are supplying 23 of the 35 trees with the remaining dozen trees still to be awarded. The field is expected to be onstream in mid 1998.

The huge Marlim field development will include several FPSO's and more than 100 subsea trees in water depths ranging from around 2,000 ft to more than 3,200 ft.

US Gulf of Mexico

While most of the significant subsea development activity occurs outside the Gulf of Mexico, the US Gulf is perhaps best known, along with Brazil, because of the publicity surrounding certain projects. For example, Shell's Mensa field development was the first to claim a subsea completion in water a mile deep.

One tree was installed earlier this year and gas began flowing in July. Two additional trees will be installed on the field with peak production of 300 MMcf/d of gas during the first quarter of 1998.

Mensa production will flow through five miles of flowline from the wellheads to the subsea manifold and then another 63 miles from the manifold to the host platform in West Delta Block 143. This is the longest flowline tieback to a host platform.

Shell is also developing the Serrano prospect in the Garden Banks area in about 3,400 ft of water. One FMC-supplied subsea tree will be tied back to the Auger TLP. Another project, still in the very early stages, is the Brutus field in the Green Canyon area in about 3,000 ft of water, with possibly one subsea completion tied back to a platform in the Green Canyon area.

Also, Shell has a prospect referred to as AFK, which includes the Ariel, Fourier and Keppler fields, in water depths of about 5,700-6,900 ft in the Mississippi Canyon area. While development plans are in the very early stages, one possible development plan could include subsea wells tied to a floating production facility.

Finally, Shell's and British Borneo's King Kong field in Green Canyon Block 473 in about 3,800 ft of water, although still in the early design phase, may involve subsea completions.

One of the more active companies in the US Gulf is Walter Oil & Gas, a small independent operator. Walter's plan is fast track development and production. The operator already has installed three subsea trees in water depths up to 1,800 ft and as shallow as 260 ft, according to ODS. The company currently is installing another three trees, all supplied by Dril-Quip, which keeps several in stock for Walter because of the fast-track method Walter employs.

In other subsea development projects, BP Exploration is developing the Troika field in the Green Canyon area with five subsea wells in about 2,700 ft of water. These will be tied back to Shell's Bullwinkle platform. BP, Shell and Marathon hold a one-third interest each in the Troika field.

Exxon is developing the Diana field in the East Breaks area with five subsea trees plus one spare. Production will be tied back to a floating production and storage spar in Alaminos Canyon. The trees, to be supplied by FMC, will be in about 4,600 ft of water.

Use of a spar and mini-TLPs, as development tools, are gaining popularity among some operators, including Amoco and British Borneo.

Amoco is planning development of the King and Kings Peak fields, which may utilize a spar and subsea completions. The spar would be installed in the King field in Mississippi Canyon Block 84 in approximately 5,400 ft of water.

Several subsea completions in about 6,300 ft of water may be installed in the Kings Peak field and tied back to the spar. The project is expected to be onstream in mid to late 2000. The most recent well in the fields was drilled in early 1997, but additional drilling is not expected to take place until late 1998 because of rig availability.

British Borneo has become fairly active in the US Gulf subsea development market by buying out interests of several operators already involved in subsea development projects. The company is presently working on its Morpeth development in about 1,700 ft of water in the Ewing Bank area. Three subsea trees will be tied back to a host Atlantia Corporation-designed SeaStar mini TLP to be anchored in Ewing Bank Block 921.

Also, British Borneo is developing the Allegheny field in the Green Canyon area, after it bought out Ensearch and Mobil's interest in the field. A SeaStar mini TLP will be used to develop this field as well. The field, in about 3,200 ft of water, is scheduled to be onstream in mid-1999. The company also is looking at development of the Kilmarnock prospect in about 2,000 ft of water in the Garden Banks area.

Expect to see more similar subsea development projects by British Borneo. The company's default development scheme will be utilizing the SeaStar mini TLP to support production from subsea completions.

Eastern Canada

The Terra Nova subsea project in the Grand Banks area offshore Newfoundland could require as many as 44 subsea wells for development tied into an FPSO. The field, in about 300 ft of water, is expected to begin production by 2001. Development drilling by the semisubmersible Transocean Explorer is set to begin in the thrid quarter of 1999. The wells will be drilled in clusters of six.

FMC will supply the trees that will be located in glory holes approximately 30 ft deep and 50 ft diameter with sloped sides to protect the wells from iceberg scouring. The flowlines will be trenched into the seafloor, also for protection.

Petro-Canada is the field operator with partners Mobil Oil Canada, Husky Oil, Norsk Hydro, Murphy Oil and Mosbacher Operating. Field development alliance members include FMC, and subsidiaries SOFEC and Kongsberg, and Coflexip Stena Offshore.

Author

Jerry Greenberg is a freelance writer based in Houston, Texas. He has 18 years experience in the offshore industry. He can be reached via e-mail at [email protected] or fax at 281-568-0254.