Gulf of Mexico Oil Finds

Gulf of Mexico Oil Finds

Sources

Tiber Well

BP taps vast pool of crude in deepest oil well

Updated Thu. Sep. 3 2009 8:39 AM ET

The Associated Press

NEW YORK -- Nearly seven miles below the Gulf of Mexico, oil company BP has tapped into a vast pool of crude after digging the deepest oil well in the world.

The Tiber Prospect is expected to rank among the largest petroleum discoveries in the United States, potentially producing half as much crude in a day as Alaska's famous North Slope oil field.

The company's chief of exploration on Wednesday estimated that the Tiber deposit holds between 4 billion and 6 billion barrels of oil equivalent, which includes natural gas. That would be enough to satisfy U.S. demand for crude for nearly one year. But BP does not yet know how much it can extract.

"The Gulf of Mexico is proving to be a growing oil province, and a profitable one if you can find the reserves," said Tyler Priest, professor and director of Global Studies at the Bauer College of Business at the University of Houston.

The Tiber well is about 250 miles southeast of Houston in U.S. waters. At 35,055 feet, it is as deep as Mount Everest is tall, not including more than 4,000 feet of water above it.

Drilling at those depths shows how far major oil producers will go to find new supplies as global reserves dwindle, and how technology has advanced, allowing them to reach once-unimaginable depths.

Deep-water operations are considered to be the last frontier for pristine oil deposits, and the entire petroleum industry is sweeping the ocean floor in search of more crude.

BP needs to invest years of work and millions of dollars before it draws the first drop of oil from Tiber. Such long waits are not uncommon. Three years after announcing a discovery at a site in the Gulf called Kaskida, BP has yet to begin producing oil there.

Projects like the Tiber well will not reduce U.S. dependency on foreign oil, which continues to grow. But new technology does permit access to major oil finds closer to U.S. shores.

BP expects Tiber to be among the company's richest finds in the Gulf on par with its crown jewel, the Thunder Horse development. Thunder Horse produces about 300,000 barrels of oil equivalent per day, as much crude as half of Alaska's famous North Slope.

Even if Tiber produces that much, it would still be a trickle compared with the largest oil producers in the world -- the Ghawar field in Saudi Arabia, which produces 5 million barrels per day.

But because it's close to home, Tiber would be especially attractive to refiners in America, where the government wants to cut down on oil imports from the Middle East.

"Early indications are that it's a significant positive discovery," said Matt Snyder, lead analyst with Wood MacKinzie's Gulf of Mexico research team.

Exploration companies recently have been pushing drilling operations farther from shore because of technological improvements that allow them to handle extreme depths and pressure, Snyder said.

It's an expensive process. A production platform costs more than $1 billion to build. Drilling a deep-water well can add another $100 million, and if crude is located, it could cost another $50 million to bring the oil to the surface.

"And when they finally get down there, it's very hot," said Leta Smith, a director with Cambridge Energy Research Associates' Global Oil Supply Group.

"It could be upwards of 250 degrees Fahrenheit. The pressures can be the most challenging aspect of it. These rocks are over-pressured, which means you need to have a lot of special equipment."

For an ambitious project like Tiber to pay off, experts say crude must cost at least $70 to $75 per barrel, though lower prices have never slowed the industry. When crude prices fell below $20 per barrel in the late 1990s, exploration and Thunder Horse never slowed.

"They're not swayed by daily price swings when it comes to planning deep-water exploration," Priest said.

BP's discovery is the latest in what's called the "lower tertiary" region, an ancient section of rock in the Gulf that is roughly 300 square miles and formed between 24 million and 65 million years ago.

Chevron Corp. drilled one of the first wells in the region in 2001, followed by more than a dozen others from companies such as Royal Dutch Shell, Australian oil company BHP Billiton, BP and Total SA, according to the U.S. Department of Interior's Minerals Management Service.

In 2006, Chevron estimated that the lower tertiary holds between 3 billion and 15 billion barrels. But it has taken years to develop wells for commercial use.

Smith said that the first drops of crude from the lower tertiary will arrive in 2010 with Shell's Perdido operation and Petrobras's Cascade and Chinook developments.

BP has a 62 percent working interest in the Tiber well. Petrobras owns 20 percent while ConocoPhillips owns 18 percent.

Perdido

Perdido

Shell has been a leader in deepwater exploration and production for the last 30 years. Perdido in the Gulf of Mexico is one of our most challenging deepwater projects. Shell has a 35% interest in the project and is the operator. Perdido is in a water depth of some 2,380 metres and will have a peak production of 130,000 boe/day from three fields. First production from Perdido is expected in early 2010.

Key facts

Location:

/ Gulf of Mexico, US
Depth: / ~2,380 metres
Interests: / Shell 35% (operator), Chevron 37.5%, BP 27.5%
Fields: / Great White, Tobago, Silvertip
Peak Production: / 130 kboe/d [API: 18-40]
Key contractors: / Technip, Kiewit, FMC Technologies, Heerema Marine Contractors

Technology

Perdido, moored in ~2,380m of water, will be the world’s deepest Direct Vertical Access Spar. The spar will act as a hub for, and enable development of, three fields – Great White, Tobago, and Silvertip – and it will gather, process and export production within a 48km radius. Tobago, in ~2,925m of water, will be the world’s deepest subsea completion.

Environment and society

Social and environmental responsibility is a central pillar of Shell’s operations. Shell’s Gulf of Mexico operations have a long association with the city of New Orleans, and this is reflected in the contribution the company has made to many recovery programmes after Hurricane Katrina. Shell’s "Coming Home" campaign and sponsorship of the New Orleans Jazz and Heritage Festival – a key event in the city’s on-going recovery – helped build confidence in the City’s future. Shell is also involved in projects such as wetlands restoration on the Texas/ Louisiana coast.

Current developments

The Perdido spar was constructed by Technip in Pori, Finland and began its 13,200-kilometre journey to Texas in May 2008, arriving in the Gulf of Mexico in August 2008. The 555-foot cylindrical spar has now been secured to the sea floor and Shell has completed the installation of the drilling and production platform on top of it. Over the next several months, approximately 270 personnel living on the platform and on a “flotel” alongside it will complete the myriad of tasks in the commissioning and hookup required to produce first oil.

There will be 22 direct vertical access wells from the spar, with an additional13 tiebacks from subsea completions. Once completed, the Perdido spar will be nearly as tall as the EiffelTower and weigh the same as 10,000 cars.

The Noble Clyde Boudreaux platform is currently drilling the production wells. In December 2008 we set a world record with the deepest completed offshore production well, at about 2,852 metres (9,356 feet) below the water’s surface. Another well currently being drilled in the Tobago field will go deeper at around 2,925 metres (9,627 feet).

Buckskin

Chevron makes deepwater discovery at Buckskin

2/5/2009 3:19:03 PM GMT

HOUSTON: Chevron (NYSE: CVX) has made a discovery at its Buckskin prospect on Keathley Canyon Block 872 in the deepwater Gulf of Mexico. The discovery is 44 miles (70.8 km) west of Chevron's 2004 Jack discovery, also in the lower Tertiary.

The Buckskin No. 1 discovery well encountered over 300 feet (91.4 m) of net pay. The well is in around 6,920 feet (2,109 m) of water and was drilled to a depth of 29,404 feet (8,962 m) by Stena drillship Stena Drillmax.

More tests are being conducted on data gathered from the discovery well. Additional work at the prospect will be needed to determine the extent and commercial viability of the discovery.

Repsol was the operator of the Buckskin discovery well with a 12.5 percent working interest in the prospect. Chevron, which holds a 55 percent working interest, will take over as operator and conduct all future work. Other partners in Buckskin include Maersk Oil America with 20 percent interest and Samson offshore Co. with a 12.5 percent interest.

Chevron Executive Vice President of Global Upstream and Gas George Kirkland said, "This is a very significant discovery in the lower Tertiary trend, where Chevron is the largest leaseholder. Continuing our success at the Jack well, Buckskin reinforces the trend's potential to provide the U.S. with important new energy supplies."

Shenandoah

Anadarko Announces Another Deepwater Gulf of Mexico Discovery

February 4, 2009 Filed Under: Oil and Gas

Anadarko Petroleum Corporation announced its second deepwater Gulf of Mexico discovery this week. The Shenandoah discovery well, located in WalkerRidge block 52, encountered net oil pay approaching 300 feet in the Wilcox formation.

“This has been a remarkable week, with back-to-back deepwater discoveries in the Gulf of Mexico,” said Bob Daniels, Anadarko Sr. Vice President, Worldwide Exploration. “Initial data indicates the Shenandoah discovery has reservoir properties that appear to be of much higher quality than industry has seen previously in the emerging Lower-Tertiary play. The success of this well and our recent Heidelberg discovery further confirms the value of Anadarko’s extensive acreage position and our capability in exploring proven and emerging deepwater basins worldwide.”

Shenandoah is located in approximately 5,750 feet of water and was drilled to a total depth of about 30,000 feet. Anadarko and the co-owners of the discovery are evaluating the well results and the next steps toward future appraisal activity. Anadarko operates Shenandoah with a 30-percent working interest. Co-owners of the discovery include ConocoPhillips (40-percent working interest), Cobalt International Energy, L.P. (20-percent working interest) and Marathon (10-percent working interest).

Also in the deepwater Gulf of Mexico, Anadarko expects to spud the Vito Middle-Miocene prospect in Mississippi Canyon block 984 and the Samurai Middle- and Lower-Miocene exploration well in Green Canyon block 432 during the first quarter. Anadarko operates these wells with a 20-percent working interest and a 33.33-percent working interest, respectively.

Cascade/Chinook

Cascade and ChinookSubsea Development, Gulf of Mexico, Mexico

Key Data

Location

Gulf of Mexico

Development Strategy

Subsea wells to FSPO

First Oil

2010 with production in Q1 2010

Water Depth

2,600m

Block

WalkerRidge Block

Shore

Around 300km (180 miles) south of Louisiana

Wells

Cascade – 2 wells

Full specifications

The most significant aspect of Petrobras's Cascade and Chinook development in the Gulf of Mexico is the company's intent to deploy a Floating Production, Storage and Offloading (FPSO) facility to accept production from the two fields. Petrobras plans to fast track the development of both the FPSO and the fields.
According to Petrobras, the schedule calls for installation of the FPSO early in 2010 with first production in the first quarter of 2010. The FPSO will be located in approximately 2,600m of water, will be the first in the US Gulf of Mexico and will be the world's deepest FPSO to date.


Det Norske Veritas (DNV) is the certified verification agent (CVA) and class agent for the project. DNV ensures that all the significant elements of the project meet US MMS (Minerals Management Service) requirements.

Cascade and Chinook fields

Cascade and Chinook are located in the WalkerRidge block, around 300km (180 miles) south of the Louisiana coast. Petrobras is the operator of both the Cascade and Chinook units, owning 50% and 66.67% of the fields respectively. The remaining 50% of Cascade is owned by Devon Energy Corporation, while Total E&P owns the remaining 33.33% of Chinook.
KBR's wholly owned subsidiary, Granherne, was awarded a three-year contract for engineering services. Granherne will be providing technical support for design of the hull for the Early Production System (EPS), Floating Production Storage and Offloading system (FPSO), and later phase Full Field Development (FFD).
The fields will be developed two subsea wells in Cascade and one subsea well in Chinook, approximately 30km south of Cascade. Each well will be drilled to an approximate depth of 27,000ft, and based on reservoir performance. Petrobras may expand production to additional subsea wells on each field.

Subsea contracts

Petrobras awarded FMC Technologies a $200m contract to supply subsea systems. Subsea electric submersible pumps will boost production from subsea to the FPSO. The contract calls for the delivery of four horizontal subsea trees, three manifolds, control systems, and two subsea horizontal electric submersible pumping systems. Deliveries are expected to start in the final quarter of 2008.
"The fields will be developed two subsea wells in Cascade and one subsea well in Chinook."
Petrobras signed a contract with Heerema Marine Contractors (HMC) for the installation of the Chinook infield flowlines. The two pipe-in-pipe flowlines are each 12 miles long with a 14in casing pipe carrying a 9in inner pipe, and will be installed in water depths ranging from 8,000ft to 8,800ft (2,440m to 2,680m) as part of the phase one. The Chinook pipe-in-pipe project is scheduled for offshore execution in Spring 2009.
Petrobras awarded Aker Kværner a $65m contract to supply subsea power cables and control umbilicals. Aker Kværner is to supply 230,000ft (70km) of high-voltage power cables and static and dynamic steel tube. The umbilicals will be made using Aker Kværner's patented carbon-fibre rod technology.
Project management, engineering and manufacturing will be at Aker Kværner's Mobile, Alabama, facility. Delivery of the cables and umbilicals is scheduled for mid-2009.
Free-standing hybrid risers, used to transport oil and gas from the subsea flowline to the FPSO and gas from the FPSO to the export pipeline.
UK based First Subsea will supply mooring connections for a detachable submerged turret production (STP) buoy to APL AS, the technology division of BW Offshore. The mooring connections supplied by FirstSubsea include 11 series II ball and taper Ballgrab connections that feature minimum breaking load of 6,600KN.
Sonardyne International was chosen to supply an integrated acoustic positioning and telemetric system as a part of an extensive life-of-field integrity monitoring system for five Free Standing Hybrid Risers (FSHRs) in the field. The deal was awarded to Sonardyne by BMT Scientific Marine Services which was chosen as the systems integrator for the project.

FPSO

The FPSO is specified to have 600,000 barrels of oil storage capacity, 80,000bpd processing capacity, and 16mmcfpd of natural gas export capacity. It will feature a disconnectable turret buoy, allowing the FPSO to move offsite during severe weather events such as hurricanes. It is moored by a polyester mooring system linked to torpedo piles and vertical loaded anchors.
"Petrobras is the operator of both the Cascade and Chinook units."
The crude will be offloaded via a shuttle tanker. Petrobras selected BW Offshore the contract to convert, install, and operate the FPSO. The $740m contract will cover delivery and installation of an advanced production and loading (APL) disconnectable submerged turret production buoy and mooring system.
Bristol-based DPS was awarded the EPC contract for the crude stabilisation and flare modules that will form an integral part of BW Offshore's design. DPS will also be responsible for managing the process and piping interfaces for the entire process topsides.

Deep-Water Gulf of Mexico

With 12 recently announced deep-water discoveries and an aggressive leasing schedule for the Western and Central Gulf of Mexico, exploration and production technology is being pushed to its limits.

With 12 recently announced deep-water discoveries and an aggressive leasing schedule for the Western and Central Gulf of Mexico, exploration and production technology is being pushed to its limits. To meet industryneeds to image deeper and more obscure targets, TGS-NOPEC Geophysical Company has over 2.5 million km of 2-D and 88,000 km2 of 3-D seismic data available in the Gulf, of which this line is an example.

For nearly 70 years, the sediments in the Gulf of Mexico have provided what seems to be no end for exploration targets. With new technologies to tackle deeper and deeper water depths and objectives, this trend continues. Lower Tertiary Wilcox reservoirs have become the focus for exploration. Recent major discoveries in this trend have confirmed it to be a worldclass petroleum system with a potential that could exceed 15 billion barrels of oil (2.4 billion m3) recoverable.

The Gulf of Mexico was formed as a result of seafloor spreading that started in Late Triassic and continued through Middle Jurassic time (GEO ExPro, v. 3, No. 4/5, pp 14-24; Since Late Jurassic, the basin has been a stable geologic province. The central Gulf has been characterized by persistent subsidence, first from thermal cooling, and later from sediment loading, as the basin filled with thick, prograding clastic wedges along its northern margins. Widespread evaporate deposits, primarily salt, play a critical role in the movement and entrapment of hydrocarbons in the Gulf of Mexico. It was deposited in the Middle Jurassic during the time when rifting pulled North America away from the YucatanPeninsula to the south about 200 million years ago. Being weaker and less dense than other rocks at depth, the salt moved south and upward responding to sediment loading that was prograding from the north. The upward movement of salt through the surrounding rock is responsible for most of the structures in the present day Gulf of Mexico slope area. Folding, detachment, and normal faulting of the reservoir rocks near the salt structures can be complex and difficult to image.