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Oil and Gas Production and Exploration, Part II

American Translators Association52th Annual ConferenceBoston, October 26, 2011

Presenter: Steven Marzuola

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Progression

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Water depths

Shallow

Up to 1000 / 1500 ft deep

Christmas tree on platform (“dry tree”)

Deepwater

Christmas tree on bottom(subsea, “wet tree”)

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Offshore “building blocks”

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Shallowest water

Lake Maracaibo, Venezuela

Louisiana

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Jackup drilling rigsMobile, flexibleUsually up to 400 ft water depth

Can handle surface trees on permanent platform, OR subsea trees

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Conventional platform

Depths up to 1000 feet

Wells drilled directionally

Surface-type wellheads

Drilling equipment often permanent

Source: California Department of Conservation - www.conservation.ca.gov

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Semi SubmersibleMore stable in rough weatherSlow transit speed

DrillshipFaster deploymentLess stableIncreased Capacities

Liquids, bulk material, personnel

Deepwater drilling rigs

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Marine Riser

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System used to keep a positive pulling force on the marine riser independent of the movements of the rig.If there was no tensioner system in place every time that the rig moved downward, the riser would buckle

Riser tensioner system

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Subsea BOP stack

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Anchor handling vesselsMoored (anchors)

Reduced operating cost (fuel)No “Drive-Off” (loss of control)No “Drift-Off”

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Dynamic Positioning (DP)

Thrusters Any water depthFaster to mobilize/demobilize, avoid bad weatherNo anchors to handle, drag on bottomExpensive to operate (fuel)

Not shown: “Built-in” type

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Unmanned submarineControlled from rig with tether

Multiple functionsVideo

Operate wellheads or BOP Stack

Classed by horsepower, number of actuators

Remotely Operated Vehicles (ROVs)

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TLP - Tension Leg PlatformSemisubmersible, moored to seafloor Production through subsea manifoldsMore stable in rough weatherReduced transit speed Onboard drilling and production facilities

Production facilities

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SPARSLarge submerged cylinder, moored to seafloorStable PlatformSurface BOP Stacks / treesWeather has less impact on operationsUsually Reduced Capacities

Liquids Bulk MaterialPersonnel

Production facilities (cont.)

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Pipelay vessels

S-Lay

Shallower water

J-Lay

Deeper water

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Subsea pipeline - complications

Concrete coating:

Reel-lay

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Up to $550,000 per day

Total operating costsUp to $1,000,000 per day =

$41,600 per hour$694 per minute$11.57 per second

Rig costs

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Subsalt

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Particular problems with salt

Salt “blurs” seismic imagesRequired advances in seismic technologyDrilling problems

Plastic salt movementAbnormal pressuresLost circulationShale problems

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• Installed in 1996

• Water depth 303 meters

• Overall height 472 meters

• Weighs 656,000 tons.

• Produces gas from 40 wells

• Towed 200 km to the Norwegian Sea. Tallest structure ever moved by man.

Norske Shell “Troll A”

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FPSO - Floating Production Storage, Offtake

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ChevronTexaco “Genesis”

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Independence Trail Hub

Located 200 miles SE of New Orleans. Anchored in 7920 ft of waterCost $385 million. Service life of 20 yearsReceives flow from subsea wells up to 30 miles away, connected via 176 miles of flowlinesPeak production 850 million cubic feet of gas per daySent to shore via 24” pipeline (cost $280 million)Current price of $4.30 / MCF, provides cash flow of $3.5 million per day

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Chevron “Typhoon”

• Installed May 2001

• Capsized during Hurricane Rita, drifted 70 miles away –September 2004

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Project lifecycleConsequence of size, expense, complexity

PhasesConceptualPre-FEEDFEED (Front End Engineering Design)Detailed EngineeringConstruction, Installation, Commissioning

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Factors that influence projects

Long lead times – 1-2 years for major equipment, longer for vessels and platformsPlans change due toMarket pricesInterest ratesOther opportunities, access via pipelines built for nearby fieldsMergers

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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 depletion.

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Peak 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?Rapidly growing demand in China, IndiaNew technologies, increased depletion ratesWhat is the effect of higher real prices?

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Historical oil production

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Steven Marzuola

281-381-9337www.techlanguage.com

Houston Interpreters and Translators Association

© 2011 Steven Marzuola

American Translators Association