Chevron plans spar installation in U.S. gulf

Genesis Spar [17726 bytes]

Chevron U.S.A. Production Co. and partners are advancing a $750 million deepwater development project in the Gulf of Mexico with the world's second production spar.

The group expects its Genesis spar to start production in late 1998 on a three tract unit in about 2,600 ft of water off Louisiana in the gulf's Green Canyon federal planning area. It will be industry's largest production spar and the first equipped for drilling.

Production from Genesis field, about 150 miles south of New Orleans, is to peak in 2000 at about 55,000 b/d of oil and 72 MMcfd of gas. Partners estimate the field's reserves at more than 160 million bbl of oil equivalent with a 15-20 year life.

Genesis is Chevron's first operated deepwater development project.

The company in the past year has participated in three deepwater wildcats in the gulf operated by other companies. Among them, Chevron holds a 40% interest in the Gemini discovery, a Texaco Inc. operated development in about 3,400 ft of water on Mississippi Canyon Block 292 (see related story, p. 36).

Operator Chevron holds a 56.67% interest in the Genesis project, Exxon Co. U.S.A. 38.38%, and a unit of Fina Inc. 4.95%.

Following joint approval of the Genesis development program in June, partners let a $300 million contract to Spars International Inc. (SII), Houston, to design, build, and install the structure. SII is a 50-50 venture of J. Ray McDermott (JRM), New Orleans, and Aker Oil & Gas Technology, Oslo.

SII holds an exclusive license on spar technology developed by Deep Oil Technology Inc., Irvine, Calif.

Genesis overview

Scott Young, Chevron's Genesis project leader, said partners believe the spar design will save money and time during development, yet perform as well as other deepwater production systems.

An integrated team of operator and contractor employees spent more than a year fine tuning the plan.

SII is to install the Genesis spar in July 1998 on Green Canyon Block 205. The Genesis unit also covers Green Canyon Blocks 160 and 161. Topsides and hull are to be mated on location.

Following installation of the spar, Chevron and partners plan to complete three predrilled wells from the structure. Preliminary plans include drilling as many as 16 wells from the vessel during 21/2-3 years, including some dual completion production wells and water injection wells.

The Genesis operating program includes injecting water for reservoir pressure maintenance. Genesis processing equipment will be able to handle as much as 30,000 b/d of produced water, which partners plan to treat and dispose overboard. Partners will send treated oil and gas to shore through subsea pipelines tied back to a platform in shallow water.

Nabors Industries Inc., Houston, is to provide a modified platform rig rated to 25,000 ft for the Genesis drilling package. Bottomhole locations of some Genesis wells will offset the surface location as much as 15,000 ft.

Genesis pays occur in strata of undisclosed age at 11,000-16,000 ft subsea. Partners are designing wells based in part on a 1990, 3D seismic survey covering about 25 sq miles. The survey images two full tracts and parts of three others.

Chevron in deep water

Chevron said the decision to advance Genesis discovery to development, coupled with its expanded inventory of deepwater leases and deepwater exploratory drilling commitments, solidifies its position as one of the gulf's leading producers.

"As Genesis takes its place alongside similar projects pioneered by others, it reaffirms the deepwater gulf's role as a promising new source of oil and gas," said Bob Herrin, Chevron U.S.A.'s vice-president in charge of Gulf of Mexico operations.

In three Minerals Management Service lease sales in the gulf in 1995 and 1996, Chevron was high bidder on 118 deepwater tracts. The company's combined winning bids at the sales added 182 tracts to Chevron's portfolio in water of 1,000 ft or more, including some acreage in more than 1 mile of water.

Herrin said Chevron plans to drill wildcats during the next 3 years using Diamond Offshore's Ocean Quest semisubmersible rig. Ocean Quest is capable of drilling in as much as 3,500 ft of water.

Genesis spar

Production spars are the latest development option for deepwater oil and gas fields.

The concept uses a catenary moored, cylindrical steel hull floating upright to support drilling operations and production facilities. Air filled compartments on the upper portion of the cylinder provide buoyancy, while tanks filled with seawater at the bottom of the hull provide weight and stability.

JRM and Aker later this year are to install the Neptune spar in the Gulf of Mexico for Oryx Energy Co., Dallas, and CNG Producing Co., New Orleans. The 700 ft tall vessel is to go on line early in 1997 in about 1,930 ft of water on Viosca Knoll Block 826.

The Genesis hull, 122 ft across and 705 ft tall, is to be moored to the seabed by 14 anchor lines. The vessel's draft will be about 650 ft.

The Genesis spar topsides is to consist of three decks, including two for production facilities. The top deck will house the Genesis drilling package, spar utilities, crew quarters, and a heliport.

The spar's drilling bay is to include 20 well slots. Wellheads will be located on the topsides, allowing conventional access to production wells.

JRM is to assemble and install Genesis facilities. The company is to fabricate the topsides beginning this fall at its Morgan City, La., yard.

McDermott Engineering, Houston, is providing engineering for the project.

Aker Rauma Offshore, Pori, Finland, will provide the Genesis hull and anchor system.