Deepwater capital expenditure has nosedived since the oil-price crash of 2014 and has not quite recovered because of the high level of break-even prices required, but some oil companies maintained their interest in the sector and went ahead with big-ticket projects anyway. Most believe the sector has bottomed out.
Brazil’s presalt region is among the areas driving deepwater oil and gas development, while others struggle with costs and technical complexity. So, in a low-oil-price environment, are such deepwater projects viable?
The major players in the deepwater market have made significant efforts to minimize costs and increase efficiency, thus shaping 2019 capital budgets.
That means activity levels in 2019 likely will mimic those of 2017–18, with perhaps some small gains from small operators taking advantages and looking for opportunities in the current low-cost environment.
However, the situation is darkened by global market pessimism. Adding to this, operator project-execution decisions have been delayed and lack of commitment and direction has caused operators to delay deepwater projects and leave the pipeline of future work empty.
Even if operators do make decisions in late 2019 to go forward with these projects, the projects are unlikely to commence until late 2020 or even 2021.
Royal Dutch Shell is considering only the Gulf of Mexico in their strategic deepwater development going forward to 2020 and beyond, and, despite low oil prices, Shell is advancing its Kaikias, Appomattox, and Coulomb Phase 2 projects in the deepwater Gulf of Mexico, reducing break-even costs and cycle times.
Through the forecast period, Africa and the Americas will continue to lead the deepwater market, accounting for 79% of forecast expenditure.
Floating production, storage, and offloading vessels will continue to dominate the floating production and storage (FPS) market, with a total of 33 deepwater units (out of 41 FPS units in total) expected to be installed during the 2018–22 period, representing 78% of FPS expenditure.
This Month's Technical Papers
Recommended Additional Reading
OTC 28872 Changing Landscape of Deepwater-Field Developments by Marcel M. Landwehr, Subsea 7, et al.
OTC 29043 The Giant Lula Field: World’s Largest Oil Production in Ultradeep Water Under a Fast-Track Development by Marcelo Becher Rosa, Petrobras, et al.
SPE 191960 Early-Stage Detection of Scales in a Deepwater Field Offshore Ghana Through Remote Monitoring of Multiphase Meter by Mahdi Darab, OneSubsea, et al.
|Morten Iversen, SPE, graduated from the University of Stavanger in 1981 and has worked throughout the world for different operators and for several service companies. He works as the Well Integrity Section head for Karachaganak Petroleum Operating. Iversen holds several patents, including a patent for a tubing-conveyed perforating-shot detection system and a deepwater blowout-preventer system for riserless light well intervention (RLWI). He has worked on implementing the RLWI technology from its infancy in the late 1980s and later as a global subsea adviser for Welltec, optimizing the use of RLWI technology to increase well recovery in subsea wells. Iversen serves on the JPT Editorial Committee and can be reached at email@example.com.|
Morten Iversen, SPE, Well Integrity Section Head, Karachaganak Petroleum Operating
01 May 2019
Murphy Oil Greenlights US Gulf Floating Production Facility
Anchored by the Khaleesi-Mormont and Samurai fields, the King’s Quay FPS will receive and process up to 80,000 B/D of crude oil.
Petrobras to Sell Shallow-Water Campos, Santos Basin Fields
UK operator Trident Energy is entering Brazil while Australian firm Karoon Energy is expanding its position in the country. Both will try to boost output from already-producing assets.
Aramco Advances 550,000-B/D Expansion of Marjan, Berri Fields
The world’s largest oil producer has awarded $18 billion in engineering, procurement, and construction contracts as part of its Marjan and Berri expansion projects.
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