Deepwater Gulf of Mexico 2004: America's Expanding ... - OCS BBS

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such as Typhoon (Green Canyon Block 237) and Constitution (Green Canyon Block 680), have achieved much shorter cycle times. ChevronTexaco acquired acreage at Typhoon in 1995, drilled the first well in 1998, and began producing the project in 2001. Similarly, acreage at Constitution was acquired in 2001, the first well was drilled that same year, and production is expected to begin in 2006. These shortened cycle times result from an accessible infrastructure and the use of proven development technologies. Deepwater leasing activity accelerated in the late 1990’s after Congress enacted the Deep Water Royalty Relief Act. The 3,000 leases that were issued during the record sales from 1996 to 1998 are nearing the end of their primary terms and, therefore, operators are facing key decisions about which leases to relinquish untested. Drilling activities are just beginning to prove the potential of these leases. There is a significant time period from lease acquisition to first production; however, this interval has decreased from 10 to less than 7 years. Figures 73a-c demonstrate average lags associated with deepwater operations. These figures use data from only productive deepwater leases. Figure 73a shows the average number of years it took to drill a well from the time the lease was issued. Figure 73b shows the average length of time from lease issue to qualification 1 of the lease as productive. Figure 73c illustrates the lags between leasing, qualification, and first production. There are two lags represented in figures 73a-c. First, there is a lag between a deepwater discovery and the operator’s request for lease qualification. Operators sometimes announce discoveries to the public long before qualifying the lease as productive with MMS (and thereby being granted field status). The second lag depicted in figures 73a-c is the lag between leasing and subsequent operations (drilling, qualifying, and production). Note that, since deepwater leases are in effect for 8 or 10 years, the data are incomplete beyond 1993. The apparent decreasing lags for leases issued after 1993 are explained by the fact that the lease evaluation process has not yet been completed. The data show an increase from 1976 to 1987 in the number of years before the first well is drilled (figure 73a). This is probably a reflection of two factors. First, the earliest deepwater leases purchased were of very high interest to the lessees and, therefore, were drilled quickly. Second, increasing lease inventories during the late 1980’s meant that many leases could not be evaluated early in their lease terms (increased deepwater leasing in the mid- to late 1980’s was probably related to the introduction of areawide leasing, the drop in minimum required bid from $150/acre to $25/acre, and the advent of 3-D seismic technology). During the 1980’s there was a gradual increase in the lag between drilling of the first well and qualifying the lease (figure 73b). During most of the 1980’s, it took 10-11 years for the average field to come on production. It is important to note, however, that the time between drilling the first well and the beginning of production dropped significantly throughout the 1980’s. That is, operators brought fields online in about 10 years, despite the fact that the first wells were not drilled, on average, until about the fourth year of the lease term by the late 1980’s. The most recent complete data (many leases issued after 1993 are still in their primary terms) indicate that the time from lease to first production has decreased from over 10 to less than 7 years. In summary, the latest complete data indicate a three-year average lag between leasing and initial drilling. There is an additional two-year average lag before the well is qualified, and a total of less than 7 years from lease issuance until production begins. Another interesting trend is shown in figure 74. For any given lease-sale year, almost 50 percent of tested leases were first drilled within three years of lease acquisition, and 23 percent were drilled in year eight or later. Twenty-nine percent of the hydrocarbon volumes were discovered during the first three years of their lease terms, but 44 percent of the hydrocarbon volumes were discovered in year eight or later. The 1 An operator may request a “Determination of Well Producibility” from MMS. A successful MMS determination then “qualifies” the lease as producible. Not all qualified leases ultimately begin production. 104
Number of Years 14 12 leas es in p rimary term 10 8 6 4 6.69 5.28 5.82 4.69 4.76 5.00 2 3.30 2.47 2.07 2.64 2.57 0.00 1.67 1.00 0.00 0 1974-75 1978-79 1982-83 1986-87 1990-91 1994-95 1998-99 2002-03 Year Lease Acquired Figure 73a. Lag from leasing to first well for producing deepwater fields. Years to first well 14 Number of Years 12 10 8 6 4 2 1.53 3.00 3.50 1.00 1.77 1.98 4.00 1.91 1.18 1.70 Additional time to qualify Years to first well leases in p rimary term 0.20 1.00 0.86 1.00 1.00 0 1974-75 1978-79 1982-83 1986-87 1990-91 1994-95 1998-99 2002-03 Year Lease Acquired Figure 73b. Lag from leasing to qualifying for producing deepwater fields. Number of Years 16 14 Additional time to first production 12 3.00 Additional time to qualify Years to first well 10 5.50 4.22 2.82 8 leases in primary term 6 6.00 2.50 1.82 8.40 1.70 1.00 4.00 4 1.27 0.90 1.11 2 0.00 0 1974-75 1978-79 1982-83 1986-87 1990-91 1994-95 1998-99 2002-03 Year Lease Acquired Figure 73c. Lag from leasing to first production for producing deepwater fields. 105
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ON COVER - The cover features four
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Table of Contents Page PREFACE.....
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Figures Page Figure 1. The Gulf of
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Figures — continued Page Figure 5
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Tables Page Table 1 List of Deepwat
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INTRODUCTION The deepwater Gulf of
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BACKGROUND DEFINITIONS The GOM Oute
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EXPANDING FRONTIER When the origina
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1992 - 1993 Louisiana Mississippi A
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1992 - 2003 Texas Louisiana Mississ
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fffffffffffffffff 1500 ft Quaternar
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In addition to the traditional oil
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15 Figure 8. Gas hydrates on the se
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Page 33 and 34:
4,500 4,000 Number of Active Leases
Page 35 and 36:
ENVIRONMENTAL ACTIVITY The extensiv
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Operators submit a remotely operate
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25 Figure 15. Loop and eddy current
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Page 43 and 44:
29 Deepwater Discoveries $ #Y Texas
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31 Texas ð PORT ARANSAS 1000 ft 15
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Louisiana Mississippi Alabama 33 Te
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Pipelines New pipelines Proposed pi
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LEASING Until the mid-1990's, leasi
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Number of Leases Bid On 600 500 400
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Page 57 and 58:
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2004 - 2005 (741 leases) Louisiana
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DRILLING AND DEVELOPMENT Deepwater
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49 Figure 30. The Discoverer Deep S
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51 Number of Wells Spudded 250 200
Page 67 and 68: 120 > 7,500 ft 107 108 100 5,000 -
Page 69 and 70: 1998 - 1999 Louisiana Mississippi A
Page 71 and 72: 1998 - 1999 Louisiana Mississippi A
Page 73 and 74: 180 160 Deepwater EP Deepwater DOCD
Page 75 and 76: 340 626 390 472 472 456 393 475 590
Page 77 and 78: Year of First Production Table 4 De
Page 79 and 80: Year of First Production Table 4 De
Page 81 and 82: A predominant workhorse of the GOM
Page 83 and 84: 3 Number Installed 2 1 0 2004 69 TL
Page 85 and 86: Flow lines to host platform Subsea
Page 87 and 88: 140 131 120 100 78 Number of Wells
Page 89 and 90: RESERVES AND PRODUCTION The deepwat
Page 91 and 92: 77 Million Barrels of Oil Equivalen
Page 93 and 94: 18 16 14 12 10 8 Number of Fields 6
Page 95 and 96: 81 Million Barrels of Oil Equivalen
Page 97 and 98: 45,000 40,000 Million Barrels Oil E
Page 99 and 100: 1992-1993 1994-1995 1996-1997 Lease
Page 101 and 102: S hallo w- wa ter GOM 11% Deepwater
Page 103 and 104: 1,200,000 1,000,000 Total productio
Page 105 and 106: 1,100,000 1,000,000 Subsea oil Tota
Page 107 and 108: 900,000 800,000 Majors Nonmajors 70
Page 109 and 110: 45,000 40,000 Max oil rate 1,000-1,
Page 111 and 112: 4,000 3,500 Shallow water Deepwater
Page 113 and 114: Texas Auger Louisiana SS182 Troika
Page 115 and 116: SUMMARY AND CONCLUSIONS This report
Page 117: 2,500 Number of leases Average U.S.
Page 121 and 122: data for this analysis include only
Page 123 and 124: 80 2500 70 60 Number of leases dril
Page 125 and 126: 4,500 4,000 3,500 Leases tested Lea
Page 127: • Nonmajor companies have made mo
Page 131: REFERENCES Bascle, B. J., L. D. Nix
Page 134 and 135: Project Name Area/Block Water Depth
Page 146 and 147: Sale Number Sale Location Sale Date
Page 148 and 149: Completed Studies [MMS Study Number
Page 150 and 151: Group Name Company Name MMS Number
Page 152 and 153: Group Name Company Name MMS Number
Page 154 and 155: Appendix G. Subsea Completions. Are
Page 156 and 157: Area Block API Number Operator Comp
Page 158 and 159: Area Block API Number Operator 144
Page 164 and 165: Year Shallowwater Oil (MBOPD) Deepw
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Deepwater Gulf of Mexico 2004: America's Expanding ... - OCS BBS

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