Archives for posts with tag: wells

The North Sea is home to a dispersed mass of steel and concrete, namely: 509 active fixed platforms with a combined weight exceeding 8 million tonnes; 1,440 subsea structures; 9,370 active wells and their completions; and over 45,000km of pipeline. Under the provisions of the OSPAR Convention, field operators will be obliged to decommission and clean all this up one day. And that day is approaching.

Diamonds And Rust

Decommissioning entails plugging wells, removing platform jackets, topsides and subsea structures, and, ultimately, complete site remediation. Oil companies in the North Sea are now having to contemplate this process at fields as recoverable reserves approach depletion. Since first oil in 1967, approximately 54.1bn bbls of oil have been produced in the area. However, production in 2015 is forecast to stand at just 2.86m bpd, compared to the 2000 peak of 5.9m bpd. The value of offshore field infrastructure consists in its ability to assist in the extraction of oil and gas; for the 47% of fixed platform tonnage installed on North Sea fields that began production more than 25 years ago, the point at which this is no longer the case is getting closer. But only 88 platforms in the area have been decommissioned so far, and for good reason.

Worth Fighting For

Decommissioning can be money and time-intensive. The decommissioning of the Brent facilities is expected to take ten years. Even small projects are expected to take two years and more than $300m in CAPEX. Hence, operators are trying to stave off decommissioning through enhanced oil recovery (EOR) to extend field life, or by tying new field developments to existing structures. For example, while the 12 wells on Heimdal are being abandoned, the platforms are being kept to process gas from Vale and other fields.

However, it is thought that in the current oil price environment, OPEX is encroaching on profits at a rising number of fields. Operators striving for fiscal discipline are between the hammer and the anvil: either run fields at a loss, or shut fields down and book the decommissioning costs.

Pain And Pleasure

This choice might be painful for oil companies but there is potential upside for many vessel owners. Drilling rigs and well intervention vessels will be needed to plug many of the wells. Crane vessels, self-elevating platforms and heavy lift vessels will be needed to remove and transport topsides and jackets (indeed, part of the rationale of the “Pioneering Spirit” is that it is one of very few units capable of lifting massive structures like the 42,500t topsides of the “Gullfaks A” gravity base platform). MSVs, DSVs and ROV Support vessels can be used to assist throughout decommissioning and will be especially important for removing subsea structures and for site remediation, when dredgers will also have a part to play. These various vessels will need to be assisted throughout the process by OSVs and utility support vessels.

Oil companies active in the North Sea might prefer not to charter all these vessels just to exit dead fields. But sooner or later (quite possibly sooner) they will have little choice. This could potentially benefit many different owners, with decommissioning becoming an important driver of North Sea vessel demand.

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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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