April 2020, Vol. 247, No. 4


A Look at Offshore Activity

By: Nicholas Newman, Contributing Editor

Thanks to operations cost cutting and improvements in productivity, investment in offshore exploration and production activities is beginning to recover from its 2017 nadir.

Some energy forecasters expect overall demand for rigs, including jack-ups, floaters and drill ships, to increase as much as 15% between 2019 and 2021. 

This translates into a rise in operational rigs from 473 in 2019 to 550 units in 2021. Notwithstanding recent oil price volatility, spending on offshore oilfield services of about $210 billion last year could surge by 15% this year, a remarkable turnaround after almost halving since 2014, according to World Oil. 

The following sections provide examples of offshore exploration and production activity in the Gulf of Mexico, Europe, Middle East and Asia. 

Gulf of Mexico Offshore

Wood Mackenzie’s U.S. Gulf of Mexico report is upbeat. In the coming year or so, Wood Mackenzie expects exploration activity in the Gulf of Mexico region to rise by at least 30% above 2019, due to increased exploration drilling budgets by Kosmos Energy, Equinor, Total, Murphy and Fieldwood Energy. Offshore activity includes the first production from a Jurassic play, key new project sanctions and an uptake in mergers and acquisitions.  

Chevron’s Anchor: The project in Green Canyon Block 807 is the world’s first ultrahigh-pressure project to reach a final investment decision. It lies about 140 miles (225 km) off the coast of Louisiana in water depths of about 5,000 feet (1,524 m).

Its development will require the use of high-pressure technologies capable of handling 20,000 psi (1,379 bar) of pressure, developed by Total. The subsea development will include the installation of vertical monopole production trees, 20,000-psi-rated multiphase flowmeters, production manifolds, a 16,500-psi- (1,138-bar)-rated integrated manifold multiphase pump station, and subsea controls and distribution system. 

The Anchor project, expected to produce first oil in 2024, will cost an eye-watering $5.7 billion for a seven-well, subsea development and semi-submersible floating production unit. 

Shell’s Appomattox: This project in Mississippi Canyon Block 392 has an estimated recoverable reserve of 650 MMboe and is ahead of schedule. This is the first Gulf development to target Jurassic-age sands. 

FMC Technologies is providing enhanced vertical deepwater trees, subsea manifolds, topside controls, a control system and a distribution system for this development in 7,200 feet (2,195 m) of water, 140 nautical miles southeast of New Orleans, in the eastern Gulf of Mexico.

Crude oil will be transported via a new 24-inch (609.6-mm) pipeline, named the Mattox Pipeline, to an existing offshore structure in the South Pass area for connecting with an existing pipeline to reach land. The Mattox Pipeline is owned and operated by Shell Pipeline Company. 

Kosmos’ Gladden: Another development is Kosmos Energy’s Gladden Deep, which has estimated reserves of 10 million barrels Based on preliminary analyses of drilling and wireline logging results, the recoverable resource is expected to be 7 million barrels gross.

Gladden Deep is a subsea tie-back planned to be brought online toward the end of the year through the existing Gladden pipeline to the Medusa spar.  Gladden Deep expects the first well of a four-well infrastructure-led exploration (ILX) program in the U.S. Gulf to begin this year. 

Kosmos said it will drill the Moneypenny prospect in the third quarter, followed by the Oldfield and Resolution prospects in the fourth quarter. These three prospects are collectively targeting about 100 MMboe.

A worker inspects the thickness of an offshore drill production pipeline.

EMEA Overview

EMEA consists of Europe, the Middle East – including the Eastern Mediterranean and Persian Gulf – and the Asia-Pacific area.

Europe: Despite the downturn in North Sea production and the decommissioning of some old fields, there are still new discoveries and developments underway. 

For example, Hibiscus Petroleum plans to develop the Marigold and Sunflower oil discoveries in the United Kingdom’s central North Sea, with flexible flowlines and umbilicals connected to a floating production storage and offloading unit (FPSO). 

The project is set to proceed in two phases to mitigate subsurface uncertainties and minimize CAPEX to first oil. Under Phase 1, three wells will likely be drilled on Marigold and tied back to the FPSO via a production manifold. 

Additional wells on Marigold, Sunflower and the recently gained Crown field could be developed in the second phase. Recently, the company brought onstream a newly drilled side track from the GUA-P1 well on the Guillemot oil and gas field in the Anasuria cluster in the same region. The final part of this project involves installing a gas-lift jumper to enhance production.

Elsewhere in the North Sea, Tata Steel has secured three separate contracts from TechnipFMC to supply high-frequency induction (HFI) line pipe for a carrier application and for both spool and pipe-in-pipe systems. 

The HFI line pipe will be manufactured in Tata Steel’s Hartlepool 20-inch (508-mm) pipe mill and will be installed by TechnipFMC, reported Tata Steel in February. These three separate projects span an area from the northern portion of the North Sea to the Central North Sea. 

Two of the three contracts will see Tata Steel provide 10 miles (16 km) of 10-inch (254-mm) carrier pipes, with three layers of polypropylene coating for anticorrosion and mechanical protection, including weld-on pads to allow the fitting of sacrificial bracelet anodes. The third contract requires several miles of 14-inch (355.6-mm) carrier pipes and 10-inch spool pipes.

Middle East: Investment by the United Arab Emirates (UAE) could reach $1 billion by 2025, analysts predict, driven by new drilling contracts, licensing awards and future bid rounds. Similarly, Kuwait will employ two offshore drill rigs in the next two years to complement onshore production to bring output up to 4 MMbpd.

Eastern Mediterranean: this region has proved to be a fertile region for energy companies in recent years, culminating in the discovery of the 30-Tcf Zohr gas field, off Egypt, and the 18-Tcf Leviathan natural gas field, off Israel. 

The Aphrodite field, off Cyprus, awaits funding for a planned 300-mile (483-km) subsea pipeline, linking the Cypriot field and other neighboring discoveries in the Idku terminal, east of Alexandria.

The proposed subsea pipeline is expected to transport 282.5 Bcf (8 Bcm) of gas annually to Egypt for liquefaction and then be re-exported by tanker to Europe and elsewhere via the Suez Canal.

In addition, there are ambitious plans to construct The East Med subsea pipeline, which will be 1,180 miles (1,900 km) in length, designed to carry natural gas from the eastern Mediterranean’s rapidly developing gas fields to Europe.  

The European Union (EU) together with the Cypriot and Israeli governments already have agreed to proceed with this $6 billion pipeline project, which is expected initially to carry 353 Bcf (10 Bcm) of gas per year from Israeli and Cypriot waters to the Greek island of Crete and onward to the Greek mainland and into Europe’s gas network via Italy, according to Reuters.

Asia Pacific: as for offshore Australia, the focal of the lng sector will probably be on backfilling the existing pluto and northwest shelf infrastructure. 

Collaboration among operators is becoming more of an option, with Woodside’s Scarborough and Browse fields the most likely mid-term candidates to provide new feed gas. Chevron’s Clio-Acme development could also go forward, if the company can secure commercial arrangements for third-party access to LNG infrastructure.

Due to low oil and gas prices and plateauing growth in demand, new money for offshore spending may slow after 2020.

STATS Group Completes 12 Pipeline Isolations for Malaysian Operator

Pipeline technology specialist STATS Group completed an extensive pipeline isolation campaign offshore and onshore Malaysia. The six-month campaign covered 12 pipeline isolations on behalf of partner Handal Energy Berhad for a major operator in Malaysia.

The work included inline pipeline isolation to allow the live repair and replacement of valves on onshore and offshore assets in West Malaysia and Sarawak. This represents the largest integrated campaign undertaken by STATS in the region.

STATS supplies pressurized pipeline isolation, hot-tapping and plugging services to the global oil, gas and petrochemical industries. The company’s DNV GL-approved isolation tools provide leak-tight, double-block and bleed isolation of pressurized pipelines while the system remains live and at operating pressure. 

The Remote Tecno Plugs (RTPs) used ranged from 12 to 32 inches (305 to 813 mm). Teams from STATS Beranang workshop in Kuala Lumpur, backed up by personnel from the United Kingdom and United Arab Emirates, worked jointly to complete the projects safely and on schedule.

“With the successful completion of two 28-inch RTP isolations on facilities in Sarawak, this brings to a close our six-month-long isolation campaign in Malaysia, during which a total of 12 safety-critical projects have been completed for valve repair and maintenance,” said Gareth Campbell, STATS Group’s regional manager for Asia Pacific.

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