Alan Petzet
Chief Editor-Exploration and Economics
The US Minerals Management Service is particularly concerned about gas production declines from the Gulf of Mexico.
High test rates have characterized some shelf deep gas completions, and flow rates in new reservoirs seem to be a function of reservoir depth.
The number of shelf wells drilled below 15,000 ft has averaged about 65 wells/year the past 10 years, lamented Chris Oynes, MMS gulf regional director. Oynes made the comment at a luncheon address at this year's Offshore Technology Conference in Houston Monday.
The shelf's vast infrastructure can help hold down the costs of deep gas projects, but much of it is aging. The older structures will be the subject of new MMS scrutiny, Oynes said.
The MMS also released new gulf oil and gas production projections through yearend 2007.
Shelf deep gas
The gulf produces 25% of US gas, and the volume produced on the shelf has declined to an estimated 3.36 tcf/year in 2002 from 4.76 tcf/year in 1997.
Since 1993, no more than 86 wells have gone below 15,000 ft in a single year. Compared with 86 deep wells in 2000, operators drilled only 75 in 2001 and 64 last year.
Of the deep wells drilled in 2001 and 2002, only 77 were completed. MMS points out encouraging test rates from some of the deep completions, however.
Flow rates in new reservoirs tended to be higher the deeper the completed wells went below 15,000 ft.
At 15,000-15,999 ft TVD subsea, the average maximum rate for 20 completions in 2001-02 was 13.8 MMcfd, and none exceeded 25 MMcfd.
At 16,000-16,999 ft TVD ss, 12 completions had an average maximum rate of 32.2 MMcfd. One tested nearly 80 MMcfd, and three others exceeded 50 MMcfd. At greater than 17,000 ft TVD ss, 13 completions had an average maximum rate of 44.8 MMcfd. Two of the 13 tested at more than 100 MMcfd, and four others exceeded maximum test rates of 50 MMcfd.
Another example of excellence in that MMS cited for shelf deep gas fields is South Timbalier Block 204. El Paso Production Co., Houston, discovered the field in late 2000 and placed it online in 2001, MMS said. Production in 2002 was upwards of 350 MMcfd of gas plus condensate.
Other shelf deep gas finds in 2003 include JB Mountain in federal waters of South Timbalier and Mound Point in state waters off Louisiana, MMS said.
A federal royalty holiday for gas produced from new shelf leases has helped draw some majors, including BP PLC, ChevronTexaco Corp., and Royal Dutch/Shell Group back to the shelf, at least for targeted prospects, Oynes said. MMS has proposed to extend royalty relief to existing leases.
Fit for purpose
One efficiency of shelf operations, existing infrastructure, is complicated by facilities age, Oynes noted.
Of more than 4,000 platforms in the gulf, 853 are 20-29 years old, 642 are 30-39 years old, and 310 are 40 years old or more.
"We are going to certainly be vigilant in working with companies on what facilities can be reused or continue to be used," Oynes said.
An MMS proposed rule issued on Apr. 21 incorporated the 21st edition of API Recommended Practice 2A, of which two chapters are relevant to aging infrastructure. RP 2A contains guidelines for evaluating the fitness for purpose of existing but aging structures and structures proposed for uses different from those for which they were designed.
Deepwater action
Many large discoveries in very deep water in 2002 fueled more deepwater activity.
Industry has brought 65 deepwater fields on production through yearend 2002, and 18-19 more will go online in 2003 and 15 more in 2004.
Around 60% of the total gulf's oil and 30% of its gas come from fields in 1,000 ft of water or more, based on 2001 figures, Oynes said.
"Exploration on a broad scale is starting to unfold" in the eastern gulf, he noted. Operators have filed 14 exploration plans with MMS for blocks leased in December 2001. Florida has given coastal zone consistency approval to 8 of the 14.
Most of the leases awarded from that sale are in 7,500 ft of water or more.
MMS tentatively scheduled another eastern gulf lease sale for Dec. 10.
Total Gulf of Mexico oil production should rise to 1.58-1.93 million b/d by yearend 2007 from 1.01 million b/d in 1996, according to MMS projections released Monday.
Gas production should reach 9.86-12.51 bcfd by yearend 2007 compared with 13.9 bcfd in 1996.
MMS made the projections based on information submitted by 20 gulf operating companies. The oil figures include condensate, and the gas totals take in nonassociated and associated gas.
