Posted on 05/04/2015 5:11:33 AM PDT by thackney
The Gulf of Mexico’s Paleogene play, also known as the Lower Tertiary, has been described as the scene of a 21st century “gold rush” for the energy industry. It also has been characterized as an innovation rush. Both are true.
The Lower Tertiary is estimated to contain between 14 and 40 billion barrels of oil—worth as much as $2.4 trillion at $50-$60 per barrel. Compared with total recent U.S. reserve estimates of 29 billion barrels, the scale of this ultradeepwater frontier is tremendous.
The size of the Lower Tertiary prize is huge, but so are its challenges: water depths of 5,000-10,000 feet; reservoirs as deep as an additional 26,000 feet beneath the seabed; downhole temperatures up to 300?F and reservoir pressures up to 25,000 psi; oil that does not flow naturally to the surface like it does in other reservoirs, and low average recovery factors.
For every 1% increase in reserves that can be recovered from the Lower Tertiary, operators will be able to increase revenues by approximately $2 billion at $50 oil. But, achieving that will require a step change in technology and a new approach centered around collaboration and integration.
In 2012, Baker Hughes created its Lower Tertiary Integrated Project Team (IPT), a cross-functional group whose first mission was to design and deliver a fully integrated, ultradeepwater wellhead-to-reservoir completion and production system, driven by customer needs and industry regulations, in half the time it would typically take for something of its complexity and scope. Composed of 95 dedicated members from various disciplines, the IPT worked closely with customers through every phase of development. Much of the research and design work occurred at the Baker Hughes Center for Technology Innovation (CTI) in Houston, where the IPT is co-located. The CTI’s testing capabilities—up to 40,000 psi and 700°F—are among the highest in the oil and gas industry. These capabilities were critical for validating specifications of system components.
The Hammerhead system, being introduced at this week’s Offshore Technology Conference, is the outcome of the IPT’s first mission. As the first fully integrated completion and production system to meet ultradeepwater requirements, it will allow operators to access Lower Tertiary reservoirs and maintain long-term production, safely and reliably, for full-field economic payback.
The Hammerhead system includes an upper completion, a lower completion, an isolation assembly and intelligent production capabilities. It was designed and built to withstand the Lower Tertiary’s extreme conditions while supporting production rates of up to 30,000 barrels per day over a 20+ year well life. Its industry-leading differential pressure rating of 15,000 psi and its compatibility with subsea boosting will help increase reservoir drainage. Remote surveillance and control capabilities will allow operators to maximize production, while proactive flow assurance will enable sustained production rates.
We expect the Hammerhead system to improve recovery factors in the Lower Tertiary by 2%, which will translate to between $4 billion and $5 billion at current prices of $50 to $60 per barrel over the life of the well. Our next ultradeepwater system will offer even higher differential pressures and will incorporate Baker Hughes’ advanced in-well electrical submersible pump (ESP) technologies to further improve reserves recovery.
The Hammerhead system represents a critical first step toward closing the technology gap to reap the rewards of ultradeep water. We are now embarking on the longer journey.
Peak oil just peaked a bit higher!
DW drilling/development is #3 on my list of technology innovations of the industry.
And there’s a long way to go yet.
US businessmen lining up to do business with Iran
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