Oil and Gas Production and Exploration, Part II

1 11 Oil and Gas Production and exploration , part IIAmerican Translators Association52th Annual ConferenceBoston, October 26, 2011 Presenter: Steven Marzuola2 Progression23 Water depthsShallow Up to 1000 / 1500 ft deep Christmas tree on platform ( dry tree )Deepwater Christmas tree on bottom(subsea, wet tree )4 Offshore building blocks 35 Shallowest waterLake Maracaibo, VenezuelaLouisiana6 Jackup drilling rigs Mobile, flexible Usually up to 400 ft water depth Can handle surface trees on permanent platform, OR subsea trees47 Conventional platform Depths up to 1000 feet Wells drilled directionally Surface-type wellheads Drilling equipment often permanentSource: California Department of Conservation - Semi SubmersiblezMore stable in rough weatherzSlow transit speed DrillshipzFaster deploymentzLess stablezIncreased Capacities zLiquids, bulk material, personnelDeepwater drilling rigs59 Marine Riser10 System used to keep a positive pulling force on the marine riser independent of the movements of the there was no tensioner system in place every time that the rig moved downward, the riser would buckleRiser tensioner system611 Subsea BOP stack12 Anchor handling vessels Moored (anchors)zReduced operating cost (fuel)zNo Drive-Off (loss of control)zNo Drift-Off 713 Dynamic Positioning (DP)Thrusters Any water depth Faster to mobilize/demobilize, avoid bad weather No anchors to handle, drag on bottom Expensive to operate (fuel)Not shown.

2 Built-in type14 Unmanned submarinezControlled from rig with tetherzMultiple functionszVideozOperate wellheads or BOP StackzClassed by horsepower, number of actuatorsRemotely Operated Vehicles (ROVs)815 TLP - Tension Leg PlatformzSemisubmersible, moored to seafloor zProduction through subsea manifoldszMore stable in rough weatherzReduced transit speed zOnboard drilling and Production facilitiesProduction facilities16 SPARSzLarge submerged cylinder, moored to seafloorzStable PlatformzSurface BOP Stacks / treeszWeather has less impact on operationszUsually Reduced Capacities zLiquids zBulk MaterialzPersonnelProduction facilities(cont.)917 Pipelay vesselsS-LayShallower waterJ-LayDeeper water18 Subsea pipeline - complicationsConcrete coating:Reel-lay1019 Up to $550,000 per day Total operating costszUp to $1,000,000 per day = z$41,600 per hourz$694 per minutez$ per secondRig costs20 Subsalt1121 Particular problems with salt Salt blurs seismic images Required advances in seismic technology Drilling problemszPlastic salt movementzAbnormal pressureszLost circulationzShale problems22 Installed in 1996 Water depth 303 meters Overall height 472 meters Weighs 656,000 tons.

3 Produces gas from 40 wells Towed 200 km to the Norwegian Sea. Tallest structure ever moved by Shell Troll A 1223 FPSO - Floating Production Storage, Offtake24 ChevronTexaco Genesis 1325 Independence Trail Hub Located 200 miles SE of New Orleans. Anchored in 7920 ft of water Cost $385 million. Service life of 20 years Receives flow from subsea wells up to 30 miles away, connected via 176 miles of flowlines Peak Production 850 million cubic feet of gas per day Sent to shore via 24 pipeline (cost $280 million) Current price of $ / MCF, provides cash flow of $ million per day26 Chevron Typhoon Installed May 2001 Capsized during Hurricane Rita, drifted 70 miles away September 20041427 Project lifecycleConsequence of size, expense, complexityPhases Conceptual Pre-FEED FEED (Front End Engineering Design)

4 Detailed Engineering Construction, Installation, Commissioning28 Factors that influence projects Long lead times 1-2 years for major equipment, longer for vessels and platforms Plans change due tozMarket priceszInterest rateszOther opportunities, access via pipelines built for nearby fieldszMergers1529 Peak Oil, or Hubbert s Peak M. King Hubbert - Shell geophysicist Theory: Production tends to follow bell-shaped curve. Can be predicted in advance. Production increases early due to discoveries and new infrastructure. Later declines due to Oil, or Hubbert s Peak (cont) In 1956, Hubbert predicted peak of USA Production late 1960s - early 1970s. Controversial, but proven right by 1976. Actual peak was in 1970. Is it applicable to world Production ?zRapidly growing demand in China, IndiazNew technologies, increased depletion rateszWhat is the effect of higher real prices?

5 1631 Historical oil production32 Steven Interpreters and Translators Association 2011 Steven MarzuolaAmerican Translators Associatio