Rethinking the Hunt for Oil
Floating production facilities and sophisticated new technologies
are reinventing
the offshore petroleum industry
Looked
at one way, the Berge Enterprise — a huge vessel now floating in the Gulf
of Mexico — is just another old ship. However, viewed from another perspective,
this former oil tanker (first put into service in 1980) offers a preview into
the future of oil production in ever-deeper water. That's because the Berge
Enterprise has been transformed into the world's largest smart FPSO. That's
short for floating production, storage, and offloading vessel, which is oil-biz
speak for a ship that's parked in place near an offshore platform. As oil is drawn
to the surface, it's stored in an FPSO. From there, either a tanker arrives to
transport the cargo, or the petroleum gets pumped to shore through pipelines.
Either
way, this new generation of immense floating production facilities allows for
highly efficient use of expensive resources — without a blip in oil production.
In fact, the Berge Enterprise — now rechristened Yùum K'ak'
Náab (Mayan for "Lord of the Seas") by its owner, Pemex,
Mexico's state-owned oil company — can offload a jaw-dropping 1.2 million
barrels of oil per day to tankers, with handling capacity to store 600,000 barrels.
"Smart
floating vessels are enabling more efficient petroleum production in more remote
locales," says Dave Reif, vice president of industry marketing at Austin,
Texas-based Emerson Process Management, which equipped the Yùum K'ak' Náab
with sophisticated wireless technology that allows for 24/7 monitoring and control
of just about everything that occurs on the floating vessel. "The further
offshore, and the deeper the water, the more the technology envelope is pushed,"
Reif adds.
One reality of offshore petroleum exploration and production
is that with today's sagging prices, many drills have gone silent, as oil and
gas giants rein in countless projects to better control cash flow. But at the
same time, new technologies are emerging that are allowing petroleum producers
to operate in places they never could have imagined just a generation ago.
"The
big petroleum companies remain committed to deep water," says Rick Carr,
a principal with Deloitte Consulting who heads the firm's upstream petroleum group.
There's good reason for that. Across the industry the belief is strong that in
the coming years, the biggest new oil and gas reservoirs will be found offshore,
typically in ultra-deep water.
Can this petroleum be safely found and brought
to the surface? That's where a growing army of service businesses, delivering
ever-slicker tools, enters the scene. A case in point is Geotrace, a Houston-based
seismic-imaging company. Bill Schrom, Geotrace's CEO, vividly pinpoints the challenges
facing oil companies. As they push farther out to sea, into deeper water, oil
drillers face extraordinary challenges.
How deep do they go? Off Russia's
east coast, ExxonMobil has drilled 39,222 feet beneath the ocean surface —
more than seven miles down — in search of petroleum. ExxonMobil struck oil
with that well off Sakhalin, and as Schrom points out, that's fortunate, because
deep wells cost big money. "A dry hole" — one with no oil or gas
—"in deep water can cost an oil company $100 million," he says.
But
one potential solution — offered by companies like Geotrace - is vivid 3-D
seismic imaging, which aims to give oil explorers a highly accurate preview of
what awaits them in the reservoir as they drill deeper. Sophisticated computing
technology is enabling these early previews, says Schrom, and he indicates that
there is a payoff. "Oil explorers are drilling fewer dry holes," he
notes, adding that explorers are now approaching a 60-70 percent accuracy rate
in drilling.
Those improved odds for success just may bring more explorers
back into the hunt. "We're also seeing 3-D seismic help oil producers get
more petroleum out of their existing wells," adds Schrom, who explains that
traditionally producers might have recovered 30 percent.
That's the payoff
of new thinking, much more of which is on display at the annual Offshore Technology
Conference (OTC .09) May 4-7 in Houston. Thousands of cutting-edge companies —
joined by 75,092 attendees in 2008, with a like number expected this year —
come together to celebrate what's new in petroleum exploration and production.
The bottom line: new technologies are rewriting the offshore oil business,
and that, say the experts, may mean more petroleum, at better prices, just when
we need it to fuel tomorrow's economic revival.
—
Robert McGarvey
A
Good Wind in Scotland
Off the Scottish coast, in the North Sea,
you can see aging oil fields that are playing out, meaning their days as useful
petroleum reservoirs are ticking toward the end. Brian Nixon, director of energy
for Scottish Enterprise, a government agency charged with stimulating economic
development, sees something else out there: a potentially vast wind energy farm.
"We believe we will be exporting energy by 2013," says Nixon, who cites
numbers that suggest by 2020, offshore wind farms may produce five times more
electricity than Scotland now consumes. For sure, there's abundant wind out there
— that's why the North Sea has always been a hostile location for petroleum
production. But that negative could now become a positive, and make Scotland the
Saudi Arabia of wind power. Crucially, adds Nixon, much of the supply chain that
now exists in Scotland to serve offshore petroleum production could be configured
to support wind farmers, without missing a payday. Call this Exhibit A of the
kind of big thinking about energy that just may produce wins for all involved
parties. "We still see Scotland producing a lot of offshore energy,"
says Nixon. — R.M.
Continental is the official airline of
OTC .09.
