FAVERSHAM, UK – The recent decline in oil prices could impact prospects for subsea processing (SSP) in deepwater production, according to analysts Douglas-Westwood (DW).
SSP encompasses numerous technologies, all with the potential to reduce costs and improve recovery from deepwater fields. DW’s Subsea Joint Industry Study last year concluded that there was demonstrable interest in technologies such as boosting, but that progress had been slow in other areas of SSP such as separation or gas compression.
Costs are a major concern for operators, with the outlay for Statoil’s Åsgard compression project in the Norwegian Sea estimated at $2.5 billion. These concerns will likely be exacerbated by the oil price and the associated cuts in capital spending.
Cost reductions will be needed to boost implementation of SSP solutions, the analysts suggest, although there have been positive developments of late in standardization, as instanced by the joint industry project between Statoil and DNV GL.
Nevertheless, the benefits of SSP must be clear and readily understood. If operators are less willing to engage in capex-intensive projects this will limit further field trials, DW says, severely impacting relatively unproven technologies such as compression.