Processing offshore oil and natural gas production below the waterline will account for a growing share of a total subsea market destined to grow steadily through 2007.
At the launch of a government-sponsored initiative to boost the UK subsea industry, Chris Dudgeon, who operates the UK consultancy OTM, reported findings of a new study providing "clear evidence that subsea processing is taking off."
OTM conducted the study in association with Douglas-Westwood Ltd., Canterbury, UK, the head of which told the meeting that global spending on all subsea operations would rise from an estimated $17 billion this year to $20 billion in 2007.
That presenter, John Westwood, Dudgeon, and others spoke Sept. 5 at a seminar on Subsea UK at the semiannual Offshore Europe conference and exhibition. The UK Department of Trade and Industry wants Subsea UK to become a focal point for technology commercialization, communication, and international business opportunities for British companies.
Study details
OTM based its study of the state of subsea processing technology on a comparison of surveys of operating companies conducted this year and in 2000.
Dudgeon noted that subsea processing isn't new. A subsea separation unit started up in 1970 in Zakum oil field off Abu Dhabi. But the technology has not developed rapidly until recently. Fewer than 15 fields worldwide use subsea processing now.
The OTM study, Dudgeon said, shows that commercialization of subsea processing technologies is advancing. Also, pilot projects and prospective developments are increasing in number. And operators are gaining confidence because subsea pumps are working well.
One of the major changes between the 2000 and 2003 surveys is that operators now focus on topsides minimization and debottlenecking as the main reason to consider subsea processing.
Surveyed operators projected spending $400 million on all subsea processing during 2003-07 and $1.2 billion during 2008-12.
In the earlier period's total, subsea separation accounts for as much as $160 million and subsea boosting, such as degasification and compression, for $220-230 million.
The study projects spending on subsea separation in the latter period of $420 million and on subsea boosting of $800 million.
Technology deterrents
To a survey question about what holds back subsea technology, surveyed operators emphasized "operator mindset" and cost.
Ian Ball, subsea systems development advisor for Shell E&P Projects, said a key trend he observes in subsea processing is use of the technology not just to perform discrete tasks but also to enhance and accelerate production and to reduce costs overall.
Subsea processing, Ball said, adds "global value" by enhancing production through reduced wellhead back pressure and enabling ultradeepwater production and longer subsea offsets.
Ball pointed to subsea applications in development plans for Ormen Lange oil field off Norway. Shell holds an interest in the field, which is operated by Norsk Hydro AS. The field's development will be based on a 140 km subsea-to-land scheme. A second phase of development would use subsea compression if the needed technology is available. Ball said a "necessary catalyst" to development of subsea processing technology is greater collaboration than exists now between subsurface and subsurface specialists. A trend that might impede progress in subsea technology, he said, is "an aging industry population."
Of the total spending on all types of subsea oil and gas work during 2003-07, Westwood said, pipelines will account for 62% and subsea wells 26%, with other categories accounting for the remainder.
Westwood's study projects that during the 5-year study period, subsea wells will total 1,626 (40% growth over the period), templates 400, control lines 1,600 km, pipelines 51,000 km, and risers 1,700 km.
