High seas: Part One

Explorers in the Gulf of Mexico are on a roll. In the last two years, several significant new deposits have been discovered across a wide swath of the region, from the younger Miocene period (an exploration play that is essentially an extension of onshore discoveries), to the more challenging Lower Tertiary anticlinal traps (which sit in deep waters beneath a thick layer of salt).

Discoveries and development

In December 2013, BP announced it had struck oil in its Gila prospect in the Keathley Canyon region, 300 miles southwest of New Orleans. The exploration well, drilled in 4900 ft of water to a total depth of 29 221 ft, encountered hydrocarbon bearing sands in the Lower Tertiary strata.

That same month, Noble Energy announced it had made an oil discovery in its Dantzler prospect, located near its Big Bend and Troubadour discoveries. The exploration well, drilled in 6580 ft of water to a total depth of 19 234 ft, encountered at least 120 ft of crude in Miocene-aged rock.

Earlier in 2013, Noble also confirmed reserves at its Gunflint field with a successful appraisal well.

Shell, which recently discovered 500 ft of net pay in its Vicksburg A prospect, is planning a sidetrack well to test an adjacent faulted prospect named Corinth. The Vicksburg A prospect, which holds an estimated 100 million boe of recoverable oil and gas, was drilled in 7446 ft of water to a total depth of 26 385 ft. It is located near Shell’s Vicksburg B and Appomattox discoveries in the Mississippi Canyon region, 75 miles offshore.

Previous discoveries are also entering field development stage. BP plans to spend at least US$ 40 billion over the next decade developing new phases of its operating hubs – Thunder Horse, Na Kika, Atlantis and Mad Dog – and three future hubs; Mars, Ursa and Great White.

Shell’s Stones field development recently moved a step further with the signing of a major infrastructure contract with Technip, which will engineer, procure and install the subsea production system.

ExxonMobil has announced plans to develop the Julia field, located in the Walker Ridge area in 7000 ft of water.

Anadarko and partners are on schedule for production in mid 2014 from the 300 million boe Lucius deepwater discovery in the Gulf of Mexico.

The EIA calculated that Gulf of Mexico offshore production reached approximately 1.32 million bpd in 2013, and that Gulf production will increase during 2014 by 160 000 bpd to 1.48 million bpd.

A third major Gulf play, ultradeep shelf gas, exists in shallow waters, but at great depth.

McMoRan Exploration Co. and other companies are exploring ultradeep prospects onshore and in the shallow waters of the gulf. They have identified targets that have structural similarities both in shape and size to the major subsalt structures being explored in the deepwater gulf.

After-effects of Macondo

The oil and gas industry has also largely weathered the aftermath of the BP Macondo tragedy. In April 2010, the Transocean Deepwater Horizon semi-submersible rig, situated approximately 40 miles off the Louisiana coast, was engulfed by an immense explosion and fire. Tragically, 11 crew members were killed, and over a dozen injured. The stricken rig eventually sank, crashing to the ocean floor 5000 ft below.

The blowout preventer (BOP), a massive, 25 t, five story device designed to prevent runaway wells, failed to close. Around 50 000 bpd of thick crude began to spill out onto the seafloor and make its way to surface, threatening wildlife, beaches and protected habitats. After several failed attempts, the well was finally sealed on 15 July 2013, 87 days after it first began to spew. US government agencies estimate that over 4 million bbls of oil escaped.

President Obama immediately declared a drilling moratorium in the Gulf, and the federal government re-organised the MMS. Offshore O&G development duties were assigned to the Bureau of Ocean Energy Management (BOEM). Regulatory enforcement was assigned to Bureau of Safety and Environmental Enforcement (BSEE).

New rules called for the next generation of blowout preventers, remotely operated vehicles, and other subsea containment equipment and enhanced safety and environmental protection. Offshore operators, including Chevron, Shell and BP, established the Marine Well Containment Company (MWCC), to create and maintain a containment response system capable of operating at 10 000 ft depths and processing up to 100 000 bpd of fluid.

In the meantime, BP conducted extensive clean-up activities, and BP and Transocean reached agreements regarding civil and criminal transgressions. As of late 2013, BP noted that it had spent over US$ 26 billion on spill response, clean-up activities and claims.

Written by Gordon Cope and edited by Elizabeth Corner

Part 2 of the abridged version of this article can be accessed here.

The full article can be found in the April issue of World Pipelines.

Read the article online at: https://www.oilfieldtechnology.com/special-reports/28042014/high_seas_part_one_regional_report_from_the_gulf_of_mexico/