April 1998 Vol. 219 No. 4  Offshore

Robert E. Snyder,  Editor

Terra Nova development, drilling cost study

With official sanctioning in mid-February by the Petro-Canada-led consortium of operator-owners of Terra Nova field off Canada's NE coast, which follows approval in January by the Canada-Newfoundland Offshore Petroleum Board of the development application, work will commence on the project. Discovered in 1984, the field is located on Newfoundland's Grand Banks, 220 mi ESE of St. John's and 20 mi SE of Hibernia.

Phase 1 will comprise six subsea wells and an FPSO capable of producing 125,000 bopd. The subsea wellheads and manifolds will be located in dredged glory holes in the seabed designed to protect the equipment from icebergs. The Grand Banks Alliance contracted for the project includes: Shawmont Brown & Root Offshore, Halliburton Canada, FMC Offshore Canada, PCL Industrial Construction, Coflexip Stena Offshore and Doris ConPro Offshore Ltd.

According to Offshore Data Services, glory hole construction will begin this summer, drilling will start in June 1999, and first oil is expected by year-end 2000. A total of 24 wells is expected, following Phase 1. Daewoo is building the FPSO. Transocean will supply the drilling rig. Topsides fabrication will be announced soon. Coflexip will do the field's subsea construction, including flowlines and glory holes. And FMC will provide for turnkey development of subsea completion systems, and manifolds, and FPSO turret mooring and manifold system.

Norway debating project delay. In early March, Subsea Engineering News reported that the Norwegian Energy Minister is proposing a 1-year postponement of further development of all fields now being evaluated by the Ministry of Petroleum and Energy. Earlier, the Ministry had suggested that there is a proposed "over-investment" for the Norwegian Continental Shelf beyond what was forecast. Apparently, the fear is that the unplanned-for investment surge would overheat the economy.

The list of projects noted by SEN to be possibly delayed by the action includes: Statoil's Gullfaks Satellites (Phase 2), Huldra, Heidrun North, Yme Beta West and Epsilon; Saga's Snorre B plus two Tordis area satellites; Amoco's Valhall waterflood; and Norsk Hydro's Fram and Grane. Not everyone in the Government is in agreement with this proposal, so the final word is not out. Meanwhile, along with the early-year crude price drop, this action was not good news for the working Norwegian service/supply industry.

New studies to reduce deepwater drilling costs. High costs of deepwater drilling and the subsequent effect on exploration have prompted the Centre for Marine and Petroleum Technology (CMPT), headquartered in Aberdeen's Offshore Technology Park, to evaluate the process of how offshore drilling operations are undertaken. CMPT says results of recent studies have demonstrated that costs have risen significantly over the past five years, causing, among other things, a 15% drop in Gulf of Mexico activity and an increase in spending in the upstream oil and gas industry of around $4 billion. This has resulted in the shelving of a number of projects.

The challenge, therefore, faced by CMPT and the upstream oil/gas industry is to reduce the current cost differential between shallow and deepwater drilling, at the same time, reducing overall drilling costs — this would mutually benefit the contractor and operator.

Feasible options include improving existing technology or reducing manpower and increasing the drilling rate. However, it is unlikely that these options could reduce costs to the required level, CMPT says. Thus, the conclusion has been reached that further development of existing technology would result only in marginal improvements.

Seabed-based coiled tubing drilling technology does have the potential to be the long-term solution, CMPT believes. Such a system may be able to drill both vertical and deviated wells in any depth of water, supported only by a simple surface vessel which provides greater portability and substantially reduced costs. It could also drill wells close to one another using simple wellhead techniques and CT tie-backs to a central wellhead manifold.

Based on these investigations, a project has been initiated which will begin in 1998, taking place in three different states. Phase 1 will involve a detailed feasibility analysis; technology gaps will be identified. And project operators, contractors, manufacturers and small high-tech companies will be involved. Phase 2 will aim to plug the technology gaps, initiate a complete system design and plan prototype development. Phase 3 will concentrate on building and testing a full prototype.

For further information, contact CMPT, Aberdeen, via Dick Winchester, Tel: 44 1224 853400, E-mail: d.winchester@cmpt.co.uk

Floating production system study. International Maritime Associates, Inc., Washington, D. C., has just published a new study, the first in a series of four reports on floating production to be prepared over the next year. The March report analyzes developments taking place in the floating production sector, lists projects under study and forecasts types of equipment to be ordered over the next three to five years.

The IMA study reports 88 floating production systems in operation worldwide, with some 60% being FPSOs, 30% semisubmersibles and the remaining 10% TLPs or spars. Another 35 systems are on order, representing a $12 billion investment; and the forecast is for up to 70 additional FPSs by 2003, to be ordered within 3 to 3-1/2 years.

IMA says the four-report series is priced at $1,400. For more information, contact Jim McCaul at IMA, Tel: 202 333 8501, Fax: 202 333 8504.

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Copyright © 1999 Gulf Publishing Company