Guntis Moritis
Production Editor
MARSEILLE, Nov. 21 -- Although their forecast numbers differ, John Westwood of Douglas-Westwood, Canterbury, UK, and Paul Hillegeist, president of Quest Offshore Resources Inc., Houston, both expect deepwater development activity to increase greatly during the next decade.
Oil production from deep water should exceed 8 million b/d in 15 years, compared with 2.4 million b/d produced in 2002, said Westwood Thursday during the 15th Deep Offshore Technology Conference and Exhibition (DOT) in Marseille.
Currently most deepwater oil production comes from fields off Brazil. But in the next decade Westwood expects deepwater production to breakdown into 1.5 million b/d from Brazil, 2.8 million b/d from the Gulf of Mexico, and 3.9 million b/d from West Africa.
Westwood's forecast
Westwood forecast during the next 5 years in water deeper than 500 m, the industry will require capital expenditures of more than $56 billion to build and install such production components as:
-- 826 subsea wells.
-- 242 surface wells.
-- 195 templates and manifolds.
-- 3,408 km of control lines.
-- 8,137 km of pipelines.
-- 64 platforms, mainly floaters.
Westwood forecast the industry also will spend $40 billion on deepwater exploration, development, and appraisal drilling in that same period.
Westwood's forecast indicates the 5-year expenditure on floaters will grow to $6.5 billion/year by 2008 compared with the present level of $3.5 billion/year. He also expects subsea processing to start making an impact on deepwater production. Although the industry installed the first subsea separation equipment in 1970, Westwood's survey of operators indicated that as recently as 2000 only 5% were considering installing subsea processing equipment within the next 5 years. But his most recent survey this year found 90% now would consider such systems.
Westwood expects 27 deepwater subsea processing installations to be in place by 2008 and 87 such systems to be installed by 2012. The estimated value of this market in 2003-07 is $370 million, growing to $1.6 billion in 2008-12, according to Westwood.
Hillegeist's forecast
Hillegeist also sees improved market conditions for deepwater activity in the coming decade and an end to "lack-luster market conditions this year," which has been difficult for most contractors and suppliers.
Like Westwood, he sees global economic trends pointing upward. He predicted the industry will install 236 new floating production units by 2010. Westwood's forecast, limited to deep water, indicated the industry would install 61 floating production units during 2004-08.
Hillegeist expects operators will make many new decisions on tract awards during 2004. Like Westwood, he forecast activity will center off West Africa, Brazil, and in the Gulf of Mexico, although he characterized the Asia Pacific region as "a sleeping giant" where activity also will trend upward.
Contact Guntis Moritis at [email protected].