Daily Archives: September 28, 2011

Deepwater drilling (video)

Uploaded by Audimanrs6 on May 30, 2010

Animation of deepwater drilling

Deep water Brazil: To venture where no driller has gone before

image

By Sheila McNulty

Drilling in the deep water Gulf of Mexico may have captured the public’s attention since the Macondo disaster. But for those in the industry itself, which considers the explosion of a deep water rig a one-off, Brazil’s deepwater fields are a far more compelling long-term story.

Brazil’s offshore oil reserves, which for years remained locked under a 2km-deep salt layer under the seabed, are estimated to hold up to 50bn barrels of oil.

Petrobras, the state oil company, is the main beneficiary, given nationalist laws that mean it must hold 30 per cent of any project as well as serve as operator in the area covering this new-found source.

The company plans to invest $224.7bn over five years to exploit this technically difficult area. And while it has deep pockets and technical abilities that few other national oil companies can claim, there are concerns it is taking on too much.

Petrobras is going to be challenged from a managerial and economic point of view,” says Jose Valera, partner at Mayer Brown, the energy-focused law firm. “The new framework for the pre-salt has the potential to create a bottleneck in development. That’s the most important drawback.”’

Deep water drilling is the most technically challenging and expensive way to extract oil. “It’s essentially going out where no driller has gone before,” Mr Valera says. “In deep water, it’s a true exploration effort. Now we’re discovering these tremendous resources. That truly is a new frontier.”

The international oil companies – along with Petrobras – are home to much of the engineering and other talent required on such projects.

Yet it is tough to get foreigners the required work permits and Brazilian legislation requires huge pay-outs to all staff on top of their salaries, according to Nick Stocker, regional director of Latin America for NES Global Talent, an energy industry head hunter.

In the past, the country’s education system did not focus on science and maths, which means it has a lower number of engineering graduates than other countries focused in this area, he says.

Brazil produces about 40,000 engineers a year, compared with 80,000 in South Korea, 250,000 in India and 400,000 in China.

“You have some technical professionals and engineers – just not enough of them,” Mr Stocker says. “That experience cannot be gained overnight.”

For Brazil to maintain the growth it is planning for its oil industry, he says, there are some who believe it will need continued funding and technical resources from the international oil companies.

To get that, the country will have to ease some of its restrictions.

He says it can take 30 to 40 days to get a work visa. Then companies must pay myriad social taxes, covering everything from holiday to severance to maternity and paternity benefits, that tack on at least another 69 per cent to salaries.

“Clients have to plan carefully and in advance, taking into account the schedule and cost implications of bringing foreign skills into Brazil,” Mr Stocker says.

The other key deep water basins are the US Gulf, as well as off Africa’s west and east coasts, the North Sea and Australia. All are competing for talent and dollars.

With most of the world’s conventional, large-scale onshore or near-shore oil reserves in areas guarded by national oil companies, ranging from Saudi Arabia to Mexico and Venezuela, there is little prospect for large-scale, long-term value creation for the international oil companies, according to Wood Mackenzie, the consultancy, which is why they are increasingly looking for reserve growth offshore.

“The shape of most international company portfolios has changed substantially over the past 10 years, with a relentless shift towards these more technically-challenging projects,’’ Wood Mackenzie said in a July report on the industry.

Deep water, liquefied natural gas, unconventional oil and unconventional gas now comprise almost 50 per cent of the future upstream value of the international majors, Wood Mackenzie says.

How quickly these individual areas will be developed depends on how quickly access, talent and investment dollars come through.

The technology, the industry notes, has made possible things that were unimaginable 10 years ago. In 2004, for example, drilling in 9,000 feet of water was a record, Mr Valera says. Now the industry can drill in 14,000 feet.

“Ultra deep water is so expensive and technologically demanding, it is an area the international oil companies see as a resurgence for them. They won’t be crowded out by the national companies, as is the case in conventional oil development areas,”’ Mr Valera says.

Whether Brazil will take enough advantage of the international oil companies’ expertise in this area remains to be seen.

Original Article

Tullow Strikes Oil at Enyenra Well, Offshore Ghana

image

Tullow Oil plc (Tullow) announces that the Enyenra-3A appraisal well, in the Deepwater Tano licence offshore Ghana, has successfully encountered oil in high quality sandstone reservoirs. Pressure data indicates that the Enyenra-3A well has confirmed an up-dip extension of the Enyenra oil field.

Located 6.5km north of the Owo-1 discovery well and 14km north of Enyenra-2A, the well was drilled to test the up-dip extent of the Enyenra oil field. Results of drilling, wireline logs, samples of reservoir fluids and pressure data show that Enyenra-3A has intersected 17 metres of 35o API net oil. Pressure data confirms a continuous oil column of at least 365 metres and that the oil at Enyenra-3A is in static pressure communication with both the Owo-1 discovery well and the Enyenra-2A appraisal well.

The Deepwater Millennium drillship drilled Enyenra-3A to a total depth of 4,031 metres in water depths of 1,102 metres. On completion of drilling operations, prior to flow testing the Enyenra field in late 2011, pressure gauges will be deployed in Enyenra-2A and Enyenra-3A to determine reservoir connectivity. The drillship will depart the Deepwater Tano block in late October having recently been replaced by the Sedco Energy drillship.

The Sedco Energy will later drill the Enyenra-4A well to further appraise the downdip extent of the field. The well will be located 6.8km south of Enyenra-2A and over 20km downdip from the Enyenra-3A well and a result is expected at the end of the year. The Enyenra-5A well also is then likely to be drilled north of Enyenra-3A to test the ultimate updip extent of the field.

Tullow (49.95%) operates the Deepwater Tano licence and is partnered by Kosmos Energy (18%), Anadarko Petroleum (18%), Sabre Oil & Gas (4.05%) and the Ghana National Petroleum Corporation (GNPC) (10% carried interest).

Elsewhere in West Africa, Tullow now expects to announce the result of the Montserrado-1 well offshore Liberia during October.

Commenting today, Angus McCoss, Exploration Director, said:

“This excellent result demonstrates that we are close to declaring the Enyenra and Tweneboa development commercial. Although the ultimate extent of the fields are yet to be fully determined, confirmation of this up-dip extension and long oil column in Enyenra is very encouraging.”

Original Article

%d bloggers like this: