In the opening session of the Ultradeepwater (UDW) Technology Conference in Houston, jointly hosted by the Research Partnership to Secure Energy for America (RPSEA) and the Society of Petroleum Engineers Gulf Coast section, SPE-GCS Chairman Ivor Ellul noted that despite depressed oil and gas prices and overall market uncertainty, the “glass is half full” for Gulf of Mexico deepwater and UDW operations.
While UDW drilling and production will experience a 2015-16 trough, a transition period will take place in 2017 with a recovery happening in 2018-19. Gradual recovery in offshore drilling requires $70/bbl in 2016 and $75/bbl in 2017, Ellul said.
Day rates, which peaked in 2013-14 at $600,000/day, will be about half of that through the transition period and will rise to about $400,000/day during the recovery phase.
During the trough, there has been attrition in the number of rigs with 60 floaters leaving the fleet since 2009 and only 36 remaining as of 2014. Additional cold stacking will be a reality for the next year. Future rig activity will be characterized by the transition from fourth and fifth-generation floaters to sixth-generation vessels and new rigs will be coming on line in the next few years.
Technology will be critical to the future of deepwater and UDW development, Ellul said. While next-frontier technology like subsea drilling rigs are on the horizon and rumored to be in development by the Russians, the broad focus must be on improved oil recovery.
In the Gulf of Mexico, the 25 largest reservoirs hold 50% of the oil in play and currently have a recovery rate of about 21%. That’s not bad, said Ellul, but there is a lot of oil being left behind.
Improved oil recovery (IOR) methods such as thermal, nonthermal, water injection, and miscible floods were studied by REPSEA for the optimal deepwater recovery rates. The verdict was that conventional oil injections, water injection, and aquifer-dump flooding injection would be the top methods in the future. A full report on this study will be available from REPSEA.
“Technology will win the day,” said Ellul. “It’s up to us to deliver.”
Contact Michael T. Slocum at firstname.lastname@example.org.