Comments: Offshore Advances
Authors: Donnelly John 
Published: February 2015

This year marks the 50th anniversary of the first use of the jackup drilling rig, one of many advances in the second half of the 20th century that revolutionized offshore exploration and production. The jackup rig opened up newer and deeper offshore areas to production. Previously, offshore drilling was limited to primarily fixed platforms embedded in the seafloor that greatly limited mobility and were costly. The few mobile platforms operating at the time were supported by sunken refloatable vessels and were ill-equipped for use in rougher waters.

According to LeTourneau Inc., a subsidiary of drilling contractor Rowan Companies, R.G. LeTourneau was the first to envision a stable and secure mobile platform that could be used in deeper waters. LeTourneau was an inventor best known at the time for pioneering advances in earth-moving machines and for being the first to develop all-wheel electric drives for heavy-duty machinery. With financial backing from Zapata Offshore Co., then headed by former U.S. President George Bush, construction on LeTourneau’s mobile offshore platform began in 1954. The result was a large, shallow-draft barge with three electromechanically operated lattice-type legs. The rig was first used offshore Port Aransas, Texas, then off the coast of Galveston, Texas, and then out in the Gulf of Mexico (GOM).

Other offshore advances soon followed, including subsea blowout-preventer systems, moored drillships, and semisubmersible drilling rigs. Significant offshore innovations continue, and many of them were on display at this year’s Offshore Technology Conference (OTC) in Houston. The Spotlight on New Technology awards highlighted many of them, and others were unveiled during the conference. ExxonMobil debuted its subsea well-intervention-module technology, which offers a riserless way to deploy a seafloor coiled-tubing unit from a specially designed support vessel. That technology is now entering the detailed design and construction phase, and it will be licensed to BJ Services and Otto Candies through a joint venture. A detailed look at the subsea well-intervention system can be found in this month’s Technology Update, beginning on page 20.

The mood at this year’s OTC was understandably upbeat after a year of U.S. $50/bbl oil prices. The outlook for offshore E&P appears favorable in the short term. The U.S. Minerals Management Service released a new report, noting that 15 deepwater projects were brought on stream in the GOM last year, with a record four spar units installed, including the world’s largest spar. GOM deepwater output could rise 300,000 BOPD this year and another 100,000 BOPD next year. A total of 107 deepwater projects are now on production in the GOM, accounting for approximately 922,000 BOPD and 3.9 Bcf/D of gas at the end of last year. More than 2,400 leases will expire next year and in 2007 in all areas of the GOM, which may lead to some highly competitive auction bidding. Many of those could be high-quality leases that have never been tested. With those lease expirations looming, many companies have recently increased deepwater exploratory drilling.

High oil prices and renewed offshore activity are putting a strain on the drilling-rig market. Construction of new offshore jackup rigs may not be able to keep up with demand over the next decade, particularly given the attrition rate of older rigs.

The pace of utilization of jackup rigs to drill in shallow waters accelerated sharply last year. A rig shortfall could be particularly detrimental to development of the GOM continental shelf, especially with a shortage of high-specification rigs needed to drill deeper zones. Others are predicting a shortage of the more technologically advanced rigs developed in the 1990s for use in deep water.