Posted on 06/24/2008 5:27:28 AM PDT by thackney
U.S. Gulf’s largest discovery producing after delays; just one well online; commissioning will be after steady state production
The BP-operated Thunder Horse field, the largest-ever oil discovery in the U.S. Gulf of Mexico, is finally onstream and headed toward higher production following repeated startup delays dating back to 2005. First oil was achieved June 14 from a single well, BP confirmed.
“We have a lot yet to do as we prepare other wells for production and continue to drill and complete other wells,” BP spokesman Ronnie Chappell told Petroleum News June 17.
The Thunder Horse platform, on a multitract development in the vicinity of Mississippi Canyon Block 822 in water depths of up to 6,050 feet, is capable of producing 250,000 barrels of oil per day and 200 million cubic feet of gas per day.
However, Thunder Horse’s actual “production profile” hinges on “well performance” and “how fast we are able to drill and connect new wells,” Chappell cautioned.
“We are making good progress,” he added. “First oil is an important milestone on the way to startup of the Thunder Horse field. We will be ramping up production in the coming months.”
Formal startup later
BP will announce the formal startup of Thunder Horse when field “commissioning” is finished and “we … achieve steady state operations,” Chappell said. The Thunder Horse field was discovered in 1999, and was designed to use the largest production drilling semi-submersible platform in the world. The platform weighs more than 50,000 tons and will produce from some of the highest temperature and highest-pressure wells in the Gulf of Mexico.
Thunder Horse and its estimated 1 billion barrels of recoverable oil became the development centerpiece for a massive pipeline system serving Thunder Horse and other large BP discoveries in the deepwater U.S. Gulf, including Atlantis and Mad Dog.
However, Thunder Horse development has been plagued with problems over the years, causing not only startup delays for Thunder Horse, but also for Atlantis due to concerns over the integrity of subsea equipment.
BP’s headaches began in 2003 when development drilling was temporarily suspended after a marine riser separated between a drilling rig and a production well about 6,000 feet below the ocean surface. The Transocean rig was drilling BP’s ninth development well at Thunder Horse when the riser separated in what industry experts said was a rare occurrence.
Initial startup set for ‘05
Thunder Horse missed its initial 2005 startup when Hurricane Dennis swept through the U.S. Gulf, purportedly causing damage to the platform and causing it to list 20 to 30 degrees, according to BP. However, the U.S. Minerals Management Service all but dismissed Dennis and its high winds as the cause of the listing. Nevertheless, BP postponed Thunder Horse production into 2006.
Later BP told analysts in a conference call that leaks in the manifold system would delay first production from late 2006 into early 2007, but didn’t specify the cause of the damage. The manifold, built by Houston-based FMC Technologies, is a massive subsea structure designed to send oil and gas from individual wells up toward the production platform. Reportedly, the structure could have been damaged during Hurricane Dennis.
One industry analyst theorized that the leaks might have come from “hydrogen embrittlement” of the welds, with the hydrogen coming from seawater that seeped in through cracks in the insulation. The insulation then may have been damaged as the manifolds, insulated in 2004, sat unused for an extended period on the sea floor.
Startup again was delayed when a series of tests revealed “metallurgical failure” in components of the field’s subsea system. As a precaution, BP said it would retrieve and replace all the subsea components it believed could be at risk. The company said the work would be done over the next year but did not expect first production from Thunder Horse before the middle of 2008. Analysts believed the fix would add tens of millions of dollars to the project. The production facility alone cost more than $1 billion.
Just a week after announcing its final startup target for Thunder Horse, BP announced postponement of first production from Atlantis, from year-end 2006 to the first quarter of 2007. Because the Atlantis project was at an earlier stage of subsea installation than Thunder Horse, BP said it had already taken the opportunity to retrieve and make precautionary modifications to the Atlantis manifolds. Production was actually brought online in October 2007 from a facility designed to process 200,000 barrels of oil per day and 180 million cubic feet of gas per day.
BP owns 75 percent of Thunder Horse and ExxonMobil 25 percent, while BP owns 56 percent of Atlantis and Australia’s BHP Billiton owns 44 percent.
I’m in the fringe. I’m interested.........
Re-elect Bush.
BP is drilling in the few relatively few areas permitted US offshore along with other US companies.
The problem is most areas of the US offshore are off limits to all companies.
Federal oil and gas leases in the Gulf of Mexico OCS are issued for a primary term of 5, 8, or 10 years, depending on general water depth as indicated on the FNOS map. The 5-year lease term is in water depths generally less than 400 meters, an 8-year lease term is in water depths generally between 400 and 800 meters, and a 10-year lease term is in water depths generally greater than 800 meters.
During the primary term, lessees do not have deadlines for conducting exploratory or development activities, except leases issued with a primary term of 8 years. The 8-year leases require commencement of an exploratory well within the first 5 years to avoid cancellation of the lease (30 CFR 256.37(a)(3)). The lease term does not expire if you do not begin drilling a well.
To keep the lease beyond this initial term they must have drilled for oil/gas.
Oil and Gas Leasing Procedures Guidelines
Minerals Management Service
Gulf of Mexico OCS Region
http://www.gomr.mms.gov/PDFs/2001/2001-076.pdf
Page 50
B. MAINTENANCE
1. Lease Term
The US could about triple its domestic oil production before reaching the capacity of our existing refineries. We would just refine more domestic oil and start by reducing the money we send to OPEC nations for their oil.
At the same time, many refinery expansions are going on all over the nation. Some of the expansions are bigger than the average refinery.
Eventually capable is not the same as current production. There are quite a few wells left to drill on this platform.
They are only starting the first production. They don’t wait until every well is drilled to get started.
Ah yes...if it's not a panacea, it's not worth doing...the mantra of no-growthers everywhere.
Because, you see, there are no panaceas in life...so those who insist upon them are actually advocating that nothing should be done at all.
Oh man...it's one thing to be ignorant.
It's quite another to be proudly so.
Some have qualities much worse than ignorance, arrogance for instance. Is there something you disagree with?
There are plenty of well between CA and the Channel Islands, in fact, the 40th anniversary of one of them leaking a terrible mess is next year.
Agreed, but nothing new since then, right ?
And when their expansion is done, 250 a day won’t cover Pascagoula’s daily consumption.
Guess I don't understand your comment.
Steny Hoyer, Nancy's #1 man in the House, actually said thsi -- with regard to the vaunted 68 million acres already under lease: "All they have to do is stick a straw in the ground".
I'm wondering when the libs' ignorance reaches critical mass.
It floats, like an iceberg. And, like an iceberg, most of its mass is underwater.
I believe it maintains station with the help of GPS, a series of gyroscopes and propellors.
Belay those comments. Obviously, they are mistaken.
The greenies have set our quality of life 20 years. We should be unleashing American technology and know how.
I will do everything I can to work that Obama does not get in office...
nick
I’m wondering that if you get a certain mass, you are pretty stationary.
You're entitled to your opinion, of course. There's nothing wrong with ignorance per se...we're all ignorant about something, most of us about a lot of things. Ignorance becomes a problem when someone doesn't respect the limits of their knowledge. IMO, the indispensible trait of an educated person is not that he's impressed with what he's learned...but the acceptance that there's a lot more he doesn't know...which informs his opinions.
What you call "arrogance" is the result of a 15 year career with oil companies, a sincere interest in economics as a science, 10 years of work in financial industries and a current Series 7/66 license. Yes, I know what I'm talking about...that doesn't make me arrogant.
This statement is arrogant...I thought I saw somewhere that the ban in many of these areas expires in 2012, not a huge leap into the future. Since new facilities coming on line and word of increased output, and ME countries storing oil offshore have no impact whatsoever, I have ruled out supply and demand...
Imagining you're so brilliant that you don't need any background to draw conclusions as sweeping as yours...that's arrogance, IMO.
There should be no shame involved for you, there are a few guys who post on these threads who know a great deal about the subject. You can learn a lot by asking questions and reading posts. Your statement about "ruling out" supply and demand means you're headed away from the answer, not toward it.
My education, background and experience leads me to conclude we've got a market defined by growing demand and artificially restrained supply.
Per your complaint...Thomas Sowell said it best:
All of us have thousands of things happening around us that we do not understand. We use computers all the time but most of us could not build a computer if our life depended on it — and those few individuals who could probably couldn't grow orchids or train horses.
In short, we all have grossly inadequate knowledge in other people's specialties.
The idea that everything must "justify itself before the bar of reason" goes back at least as far as the 18th century. But that just makes it a candidate for the longest-running fallacy in the world.
Given the high degree of specialization in a modern economy, demanding that everything "justify itself before the bar of reason" means demanding that people who know what they are doing must be subject to the veto of people who don't have a clue about the decisions that they are second-guessing.
It means demanding that ignorance override knowledge...
Every time oil prices shoot up, there are cries of "greed" and demands by politicians for an investigation of collusion by Big Oil. There have been more than a dozen investigations of oil companies over the years, and none of them has turned up the collusion that is supposed to be responsible for high gas prices.
Now that oil prices have dropped big time, does that mean that oil companies have lost their "greed"? Or could it all be supply and demand — a cause and effect explanation that seems to be harder for some people to understand than emotions like "greed"?
If you're to be an informed voter, a proper citizen, you need to know about issues such as this. Otherwise you're a prime target for demagogues who are too skilled at exploiting ignorance.
Thanks for the clarification. Just learning about all this.
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