PRESS RELEASE
Jack - "The answer to a nation's prayers?" With much of the world embroiled in uncertainty it is good to know that the offshore oil industry, which has come under so much criticism in the past, has come up trumps in providing an increased measure of security of supply to the US homeland. Jack in Walker Ridge 758-759 is rumoured by some to be one of the best deepwater offshore discoveries ever made in the US Gulf of Mexico. With the announcement this week of a further 18 months delay in BP’s Thunder horse deepwater project, Jack's importance in illuminating the potential of a whole new play cannot be underestimated. Infield Energy Data Analysts new edition of the Global Perspective Deep & Ultra-deepwater Market Update Report 2007 – 2011, puts into perspective whatever Jack’s final recoverable reserves turn out to be. “No player in the C21st offshore oil and gas industry, that wants to be successful, can ignore deepwater and this new report is just the one to tell you what is truly going on out there in terms of investment, production and reserves” writes Infield’s Data Manager Dr. Roger Knight. The past ten years has seen the deepwater ( ≥500msw) offshore arena evolve from a frontier area to an intrinsic and strategically important element for most global offshore operators’s asset portfolios. A cursory glance at the annual reports of these operators will show the prominence that deepwater activities now command and underlines the value of its success. But compared to shallow water areas, in relative terms the deep and ultra-deepwater regions are still under-explored and therefore hold considerable potential. The Global Perspectives Deep and Ultra-deepwater Market Update Report 2007 - 2011 forecasts that global deepwater capital expenditure will continue its growth trend of the past five years, resulting in an increase in total expenditure to over $80 billion. This expenditure relates to platforms, subsea, pipelines and control lines and is shown in the actual year of spend.
There are many projects in West Africa for instance in Angola such as Dalia and Kizomba, due to be completed shortly or recently completed and beyond these, there are developments such as Kizomba C, Pazflor and Block 18, to name just three. Africa as a whole is predicted to account for a forty-four per cent of global deepwater capex over the 2007-2011 period. In Latin America, Petrobras is still the major player and has remained aggressive in developing its deepwater prospects. Towards the end of the decade, Chevron with it’s Frade development and Shell with it’s BC-10 project look set to be the next foreign operators to develop in this deepwater region. In total, projects in Latin America look set to account for twenty-seven per cent of the global deepwater capex forecast. The third area of deepwater activity in the Atlantic Basin is the Gulf of Mexico with several major deepwater prospects recently developed such as Na Kika, Holstein and Mad Dog in addition to the delayed Thunderhorse and Atlantis projects. There did seem to be less on the horizon, however, projects such as Blind Faith, Shenzi, Tahiti, Knotty Head and the Perdido Hub area show that there are opportunities coming forward. Beyond the Atlantic Margin there are pockets of new deepwater players. In Asia there are developments forecast off the coast of eastern India, offshore Sabah Malaysia and off the east coast of Kalimantan. Other areas of new prospectivity include Australia with tie back to shore projects such as ExxonMobil’s Jansz field at 1300 msw becoming an integrated part of the Greater Gorgon area project. Despite this healthy level of new developments there are potential issues that face the industry if the current feel good factor is to be maintained. The major issues centre on bottle necks in the supply chain which are already becoming apparent. Such issues are having an impact on scheduling costs and although the contracting community has added deepwater capability to take advantage of the growth in deepwater activity, it still seems likely that the industry is going to reach certain choke points – particularly regarding deepwater pipelay and heavylift. This is likely to have cost implications in terms of day rates and mobilization and demobilization costs, but also it could have a significant impact on scheduling and cause delay to on-stream dates if problems such as bad weather and strong currents for instance delay installation programs. Whilst operators are no doubt going to continue to seek new prize discoveries, the reality of deepwater is that it is no longer the frontier zone that it was five to ten years ago. With fewer new prospects on the longer term horizon, particularly in North America it looks like there is a two pronged approach being taken by operators in the deepwater arena. Whilst new hub developments are always likely to be sought, operators look set to concentrate on maintaining production profiles by bringing tie-back fields on-stream as ullage permits. ISL’s view is that the number of new facilities expected to come on-stream is likely to fall back from the current high levels , but will be replaced by an increase in the market of subsea satellite tiebacks. However, the onset of this phase may well be pushed back by discoveries on the scale of Jack. - ends- |
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(notes to the editor) Infield Systems Limited is a privately owned independent limited company providing database, publications and analytical services to the offshore oil and gas industry. Contact : |
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