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‘Pre-salt’ is usually a term associated with Brazil, where giant offshore field discoveries in the Santos and Campos basins have been grabbing headlines since 2007. Now oil companies are looking across the ocean for their pre-salt game. Conjugate basins offshore Gabon, Congo and Angola could be as juicy as the Santos and Campos pre-salt plays have proved. Following a number of recent scores by Cobalt, Eni, Harvest, Maersk and Total, the hunt is on.

Gearing Up

As the Graph of the Month shows, 16 wells targeting West African pre-salt reservoirs have been drilled since start 2011 with a success rate of 75%: 9 offshore Angola, 6 off Gabon and one off Congo. Oil from West African pre-salt was in fact first found in 1968. Its prospective yield was not appreciated though, as only recently did seismic imaging become able to give an accurate picture of the pre-salt. The ultra-deepwater of Angola’s Kwanza Basin also inhibited pre-salt exploration before sixth generation floaters. But, as Brazil has shown, operators now have all the technology they need to pursue the pre-salt.

Hunting Elephants

Some 27 future pre-salt wells are reportedly planned by oil companies or are anticipated through to end 2015, as the Graph of the Month shows. Four of these wells have been spudded. Often smaller E&P companies play a vital role in opening up new frontiers. In West Africa though, supermajors and other large players are already loading up. Conoco has 4 planned wells; Repsol, 3; Eni, 2; Shell, 2; and Total, 2. Of the 27 wells, 70% are offshore Angola and will therefore be in water depths ranging from 800-2,000m. The remainder are to be spudded off Gabon, likely in water depths up to 300m. In either case, companies will be hoping to hit world-class finds, like Cobalt’s Cameia discovery, which is expected to be brought onstream at 80-120,000 bpd in 2017.

Fieldcraft

So, the West African pre-salt play is still in the early stages of exploration and appraisal. If it proves prolific though, and if operators can bring it to fruition, a pre-salt bonanza would more than offset production decline from West Africa’s mature fields. With less stringent local content requirements and more international oil company control, development may be less fraught than in Brazil. Cobalt have already announced plans for 3 multi-field pre-salt hubs centred around the Cameia, Lontra and Orca fields offshore Angola. Given that the average water depth of Angolan pre-salt wells is 1,274m, MOPU solutions are likely to be favoured. The previous caveats noted, the FPSO ordering boom in Brazil could be replicated in Angola, which already accounts for 23% of world FPSO deployment (second to Brazil). In the shallower waters off Gabon, fixed platform solutions are probable, if finds reach the development stage.

In the near term then, the pre-salt safari offshore Africa looks to be an exciting campaign, with potential to generate even more interest in the region and hence opportunities for survey vessel and rig owners. Out towards the end of the decade, Angola could be the new Brazil, with pre-salt development contracts abounding.

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SIW1098In 1961, the world’s first subsea completion was installed on a well in the Gulf of Mexico. Over the last 52 years the use of subsea trees has spread to the majority of offshore producing regions, with a total 4,851 trees installed by end-2012. Since 1990, the world has seen a growth in the number of deep water (>500m) tree installations. The use of subsea trees and developments appears set to revolutionise the offshore oil and gas industry, placing more focus on subsea fabricators.

Into the Deep End

The Graph of the Month shows the number of subsea trees installed per year from 1990 to 2016 (potential/under construction post-2013) and a breakdown of shallow versus deepwater installations. During 2011, the subsea tree demand hit a low point in the wake of 2008’s economic troubles. Since then however, the sector has seen a boom in tree installations, with expected future installations for 2014 up by 77% on 2013 and 2016 projected installations up a staggering 174% on 2013, with a total of 916 potential trees. Furthermore, the near future will demand more subsea trees with deep water, high pressure technologies, as shown by the increase in the share of trees in deep water of around 40 percentage points since 2000.

Subsea Honeypots

The region utilising the most subsea trees is NW Europe, with 1,638 active. The region’s ageing fields, containing smaller, marginal pay zones, mean that subsea trees and tie-backs provide a solution for continuing productivity in the North Sea. In Latin America, subsea trees are allowing for the development of wells in the ultra-deep water pre-salt plays of Brazil. The region has 919 active trees and accounts, along with West Africa, for many of the potential installations over 2013-2016. Subsea is not for everyone however: in the shallow Middle East, less than 40 trees are active, with wellhead platforms preferred.

Ready Yourselves

Given the extra subsea tree demand, how will the market cope? As previously highlighted, demand will have a bias, with many being required in the North Sea and Brazilian pre-salt areas. GE Oil & Gas have reportedly stepped up their UK manufacturing capacity for trees by circa 40%. However, with only 4 major subsea tree fabricators worldwide, supply may bottleneck in the coming years.

A boom in subsea tree demand will also affect the installation vessel markets. Traditionally, MODUs and other drilling vessels were used for tree installation. However, with the hike in rig costs (45% since end-2010 for jack-ups), installation contractors have been increasingly turning to installation by relatively cheaper MSVs. A total of 68 MSV vessels are on order, which despite accounting for 25% of the current fleet, may grow. There is also an additional 10% of the Dive and ROV Support fleet on order, a number which is likely to increase over the next 4 years.

So, Petrobras, Statoil and the supermajors are employing subsea technology increasingly frequently. Demand is growing for trees and associated infrastructure, along with installation units, promising a positive period for subsea fabricators.