Mars B Olympus tension leg platform (TLP), deep-water oil field in the Gulf of Mexico
Olympus, Shell’s deep-water project in the Gulf of Mexico came on stream in February 2014, six months ahead of schedule and under budget due in large part to a standardised TLP design

Over the last decades the industry has moved into shale and tight oil and gas as one way to deliver more energy. This approach relies on advanced technologies to unlock oil and gas trapped tightly in rock on shore.

The second industry shift has been to move further offshore, into water kilometres deep where formations contain thick pay zones of oil and gas in permeable rock – features that equate to strong initial production rates.

Deep-water oil already accounts for 7% of all conventional oil produced. The International Energy Agency (IEA) predicts an expansion to 11% in 2040, reaching a level of almost 11 mb/d. However, to realise this potential we need to continuously advance our technical capabilities in these extreme environments. We must also continue to maintain rigorous safety standards – under ever-increasing scrutiny – and respond to the economic pressure that demands heightened cost efficiency.

Technological breakthroughs

If we look back at the changes in deep water over the last decades, we can see how far our industry has already come.

Exploration was until recently restricted by thick salt layers – such as beneath the seabed in the Gulf of Mexico – which absorb the sound waves sent out during seismic surveys. The introduction of an advanced technique now allows geophysicists to image the formations below the salt. This capability has revealed previously hidden resources in seemingly mature basins and a number of new frontier plays.

Historically, offshore production has evolved from the shallows with steel or concrete gravity base structures sitting directly on the seabed. The development of ‘directional drilling’ – drilling from the same central location to a wider area – enabled greater resource recovery from a single platform.

Ultimately, the quest to tap resources beyond a platform’s footprint led to the advancement of subsea systems in the 1960s. As water depths move beyond the affordability of fixed structures, subsea technology becomes integral to the field development – production facilities must float.

The technologies we see today have already attained a mind-blowing level of sophistication in a relatively short space of time. But progress must continue.

Complexity sparks innovation

Research and development goes hand-in-hand with the industry’s need and ability to unlock oil and gas from increasingly complex reservoirs. As water depths increase, so too does the pressure required to lift oil and gas to the host production platform. The industry is moving to use technology on the seabed that separates out oil and gas before boosting it to the surface in fields where natural reservoir pressure is insufficient.

Going further below the seabed brings contrasting challenges of high pressure and high temperature. We must adapt our subsea equipment and production techniques for optimum performance under these testing conditions.

Collaboration across disciplines within an energy company is essential for success. Material scientists, subsea, structural, mechanical and marine engineers play just as important a role in this remarkable journey as geoscientists.

The significant investment in researching and developing new technologies also calls for collaboration between companies. International oil companies (IOCs) are joining forces to develop hardware together, helping to keep down costs for each individual operator.

But it’s not just new technology that enables this approach. We see an increasing opportunity in standardising and replicating equipment across projects. IOCs benefit from their global array of projects in sourcing materials which can be catalogued and pre-ordered by a dedicated team. This approach can cut delivery time by months, more than compensating for the initial investment in standardisation.

Contracting and procurement teams are also developing long-term relationships with suppliers and contractors to ensure that lessons are shared and replication opportunities applied.

Safety first – and last

Perhaps the biggest challenges ahead are those of safety and reputation. The industry’s moral obligation to protect and keep safe everyone who works with us remains paramount. Our collective good progress is simply not good enough. The industry equally has a duty to protect the environment in which it operates. A single failure by any player has the potential to remove the ‘social licence to operate’ for the entire industry, as past events have demonstrated.

Deep-water developments have many personal and process safety considerations that require painstaking analysis and control to deliver flawless performance. And it is this flawless performance that will protect the industry’s reputation.

In a world hungry for energy we have limited options to meet the growing demand. It is through our industry’s relentless focus on safety and innovation that we are making the great promise of deep-water oil and gas a reality.

First published in Petroleum Review September 2014

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