Ultra Deepwater Advances in Drilling and Development

Ultra Deepwater Advances in Drilling and Development J. Keith Couvillion Chevron North America Exploration and Production Company OCS Policy Committee Meeting March 6, 2008 Outline  Shelf, Deepwater & Ultra Deepwater  Deepwater Trends  Drilling & Completion Advances  Production Systems  Floating Production, Storage and Offloading System (FPSO)  Questions 2 Gulf of Mexico Seafloor Bathometry -Shelf, Deepwater and Ultra Deepwater Houston New Orleans 3 Industry Production from Deep Water is Moving Deeper at an Increasing Pace '50-'54 '55-'59 '60-'64 '65-'69 '85-'89 '90-'94 '70-'74 '75-'79 '80-'84 '95-‘ 99 ’ 05 00-’ 0 1500 Production Water Depth (f) 3000 1,680’ 4500 6000 7500 9000 10,500 11,300 Exploration 1,472’ 1,063’ Eiffel Tower Compliant Tower Empire State Building 4 Deepwater Geological Trends Houston New Orleans Miocene Trend Wilcox Trend 5 Certain Wilcox Deepwater Wildcats Announced Discovery Dry hole (non-commercial hydrocarbons encountered) Wilcox Penetrations (results not announced or secondary objective) Miocene dry hole on Paleogene test Well Test (Jack #2) 250 miles to Houston 18 0 m ile st o Co Tonga Shenzi Neptune Atlantis Mad Dog Deep CASCADE rp u sC Big Foot hr is ti BAHA DIAMOND BACK TIGER TOLEDO Kaskida Tucker CHINOOK STONES DAS BUMP TOBAGO GREAT WHITE TRIDENT ~ 200 Mi. SARDINIA HADRIAN ST. MALO JACK 6 Deepwater Gulf of Mexico Technically Challenging Environment Much of the prospective Gulf of Mexico deepwater area is covered by layers of massive salt, which inhibits deeper seismic resolution. 6,000’ (1800 m) Salt Canopy 7,500’ (2300 m) US m) 10000’ (3000 m) 13 0 0’ (40 0 Mexico 7 Technology is Pushing the Envelope on Water Depths Transocean Cajun Express Under 4,000’ water and of five miles below the seabed Drilling in depths that only yesterday seemed impossible… 8 Ultradeep Water Gulf of Mexico Drilling Technical Challenges Sea Level Empire State Building ~500 Meters Gulf of Mexico Storms and hurricanes Loop and eddy currents cause vortex induced vibrations and motions to drill strings Unpredictable high pressure gas charged stringers and faults near surface Mobile/flow-able/dissolvable 10,000’ thick salt canopy with unpredictable layers of highly variable trapped sediments Unpredictable base of salt – rapid pressure differentials “ Thief zones”of significantly lower pressure which cause lost circulation –fluid loss Ultra-deep reservoir with high temperatures, high pressures and low natural flow-ability 8,000’ Suprasalt Sediment 16,000’ Allochthonous Sigsbee Salt Canopy 24,000’ Upper Tertiary Sediments 32,000’ Lower Tertiary Cretaceous Autochthonous Salt 40,000’ Basement 9 Effective Drilling and Completions Optimizing Performance Drilling and Completions Technology Integrated technology solution  Seismic imaging  Reservoir modeling  Rock mechanics  Drilling operations  Real-time monitoring (Live video camera and feed from rig) 10 Semi-Submersible Drilling Rig Moored/Anchored 11 Semi-Submersible Drilling Rig Dynamically Positioned 12 Drill Ship - Dynamically Positioned Length - 835 Ft. Breadth - 125 Ft. Max. Drill Depth –35,000 Ft. Max. Water Depth –10,000 Ft. 13 Offshore Drill Ships (Operating Displacements) Drill Ships  19,750 st Peregrine I  25,230 st Seven Seas  75,000 st Global SantaFe Luigs/Ryan  110,250 st Transocean Enterprise class  113,557 st Transocean Pathfinder class Semi-submersibles  39,284 st Ocean Baroness  51,250 st GSF Dev Drillers  57,969 st Horizon  58,096 st Leiv Eiriksson USS Nimitz 94,772 st 14 Deep Water Technology Breakthrough New Deep Water Drillship  Most advanced drilling capabilities  Dynamically positioned, with double-hull  Two drilling systems in a single derrick  Stronger and more efficient top drive so wells can be drilled deeper  Other unique features will target drilling wells up to 40,000 feet of total depth Transocean’ Discoverer Clear Leader s  Variable deck load of over 20,000 metric tons; capable of drilling in water depths of up to 12,000 feet 15 Deepwater Well Test  drilled to a total depth of 28,175 feet. Well  Completed and tested in 7,000 feet of water, and more than 20,000 feet under the sea floor than 6,000 barrels of crude oil per day  During the test, sustained a flow rate of more 16 Deepwater Production Systems 17 Gulf of Mexico Seafloor Bathometry -Shelf, Deepwater and Ultra Deepwater Houston New Orleans 18 Deepwater Seafloor Topography 19 Floating System Concepts (Dry Tree Solutions) Tension Leg Platform −Weight sensitive −Depth limited (Wet Tree Solutions) SemiSubmersible +Quayside integration −Riser fatigue FPSO +Storage capacity +Quayside integration −Riser interface −Riser fatigue Spar −VIM effects −Suppliers limited 20 Water Depth Comparison Water Depth (m) TLP Spar Genesis Semi Hutton Troll FPSO 0 Captain West Seno Tahiti Mad Dog Magnolia Devil’ s Tower Thunder Horse Na Kika Blind Faith Independence Hub Field Proven Technology qualified 3,000m 21 1,000m Girassol Agbami 2,000m Seillean Major Capital Projects –Gulf of Mexico Tahiti Field Development  Total capital: $3.5 Billion Field Development with Spar and Drill Centers  2 subsea drill centers producing Integrated  Water Depth: 4000’  to a truss Spar Model: 125 MBOPD/70 MMCFD and peak production Hull Topsides  400-500 MMBOE potentially recoverable 22 Major Capital Projects –Gulf of Mexico Tahiti in Fabrication Hull Fabrication Subsea Production Manifold Hull 3-D Model Hull Transportation Subsea Tree Topside Design 23 Major Capital Projects –Gulf of Mexico Blind Faith Project Seafloor Equipment 24 Deepwater Challenges 25 Deepwater Facilities/Infrastructure Meeting Future Technology Challenges Compliant Tower Future Floating Production System Model  More Ultra Deepwater Developments  Reliability –Surface, Risers & Export ~500 Meters  Subsea Intervention  Small Field Development Systems  Standard Facility Concepts  Standard Regional Subsea Systems  Reliability –Seafloor Systems  Flow Assurance  Long Distance Subsea Tiebacks Equipment  Life-Cycle Water Management 26 Subsea & Pipelines  Qualify seafloor boosting beyond 5000 ft. WD  Enable long distance tiebacks for satellite field development  Subsea Reliability – Subsea Pumps ensure subsea systems operate as designed Multiphase Flowmeters Subsea Electrical Power Distribution 27 Cost, Schedule, and Technical Challenges    Higher Pressure & Temperature More Difficult Reservoir Fluids Remote Areas with Limited or No Infrastructure Industry has More Deepwater Projects Underway than ever before Certain Suppliers are Fully Booked Extreme Competition for Limited Manpower and Supplier Resources    28 Summary Many technical challenges remain to be solved, but the industry is focused on finding solutions. Advances in technology have allowed industry to drill and produce offshore resources safely. Access to areas currently unavailable for leasing could provide future sources of oil and natural gas for the U.S. 29 Questions ????? 30