Yesterday's Frontier is Today's Challenge: Deepwater Exploration and Development
Authors: Drennen W.T. 
Published: October 2008

Industry's search for hydrocarbon resources has progressed into water depths greater than 6,000 feet. While opportunities appear exciting, their economic success is anything but certain. Requirements for economic success in this challenging, natural environment include the negotiation of acceptable levels of government take and the ability to find and develop reserves at low unit cost. This presentation will focus on the latter. Low unit costs are obtained by: finding large, high quality resources; defining optimal depletion plans; and implementing a cost effective development system. Discovery and delineation of new, high quality resources are facilitated by the application of state-of-the-art geoscience technology and a very deliberate selection process. Emerging geoscience technologies like 3-D visualization, coupled with high quality seismic, and integrated with improved understanding of deepwater sand deposition can improve the selection criteria for an effective exploration strategy and overall geologic success rate. A strategic appraisal drilling program to capture maximum downhole information without the benefit of a large number of appraisal wells will help generate an optimal depletion plan. While costs to acquire critical reservoir information may control business decisions, technological advances in areas such as drilling, coring, core analysis and geochemical analysis have greatly increased the flow of information from fewer wells. The selection of a cost effective development system requires:innovative production system approaches relative to those applied in shallow water,detailed comprehensive analyses to ensure system performance integrity, andthe ability to understand and optimally integrate various development approaches.

Introduction

Technology development and application have been and remain critical elements for cost effective development of today's deepwater discoveries. Leading edge technology coupled with an experienced deepwater geoscience and engineering team are critical to optimizing the value of a deepwater portfolio. Moreover, a very deliberate, highly focused evaluation process can alleviate much of the uncertainty surrounding a business decision to explore for and appraise large, high quality hydrocarbon reserves. Activity over the last decade illustrates advances in technology. For example, industry has significantly improved the capability to predict occurrence, geometry, and internal characterization of sands transported hundreds of miles offshore; ability to drill in water now approaching 8,000 feet; and the construction of development systems capable of extracting hydrocarbon from beneath a mile or more of water.

The persistent pursuit of technology by our industry over the last 10 or 20 years, when the expectation for commerciality was bleak due to uncertain oil prices, underpins today's success. The progression of technology has also been accelerated by the early indications of sizable discoveries in deep water and the opening of new basins around the world. Within the last several years, 1996–1998, industry made 66 worldwide discoveries with reserves greater than 100 million barrels of oil. Nearly three-quarters were offshore.(1) In 1998, nearly 4 billion oil equivalent barrels of oil were discovered from water depths exceeding 3,000 feet. Prior to 1985, industry rarely looked beyond the 1,500-foot mark in the Gulf of Mexico in the belief that reservoir sands could not be transported 100-150 miles across the shelf margin. Today's Gulf lease map shows license awards to the U.S.-Mexico boundary in almost 11,000 feet of water and 350–420 miles offshore Louisiana. Exciting, new opportunities in deep water however, are not just