Selecting Cost-Effective and Safe Deepwater Completion Tieback Alternatives
Authors: Eriksen Remi , Saucier Brian 
Published: October 2008

Field development profitability is a function of many income and expense factors such as capital expenditures (CAPEX), operating expenditures (OPEX), production rate, product price and the frequency of component failures. Component failures reduce the field total production rate and increase OPEX. The losses are directly drawn from the bottom line. Regardless of the chosen concept, the ability to efficiently keep production wells on stream is one of the most important factors determining field economic performance.

When moving into deeper water, subsea interventions become more expensive and are associated with longer waiting times for the required intervention vessels. Furthermore, deepwater developments rely on new technology, which has yet to be field proven. This paper gives an overview of the challenges related to the selection of deepwater completion tieback concepts.

There are number of different ways of developing oil production fields in deepwater. Dry Tree Tieback Concepts ("Dry") require a platform to support the permanently attached production/intervention risers, but provide the efficiency and the convenience of direct well access for remedial activities. Subsea Tieback Concepts ("Wet") provide greater flexibility in utilization of existing infrastructure, well location and development schedules, but require more challenging and costly well interventions/workovers. The fundamental question is whether the higher CAPEX of a dry tree tieback system is justified for the lower OPEX as compared with a subsea tieback system.

The paper discusses the typical advantages and disadvantages with "wet" and "dry" tieback alternatives and outlines a method for how the experiences gained by the deepwater industry so far can be factored into business decision analyses that seek to evaluate the profitability of alternative field development concepts.

Introduction

The economics of deepwater developments are different from shelf activities. Deepwater is characterized by high capital expenditures with relatively low operational expenditures and high sustainable production rates - hence high costs for production interruption.

Until recently it was quite common for the decision making process used to evaluate deepwater ventures to focus on optimizing the balance between potential revenue, (CAPEX) and operational expenditures (OPEX) according to the equation:

Profit = Max (Revenue - CAPEX - OPEX) (1)

The shortcoming in this equation is that it does not take into account unscheduled and unplanned events (such as component failures) that have the potential to shut down production for a long time, destroy a facility, pollute the environment and/or tarnish a company's reputation.

When moving into deeper water, the economic penalty for delayed/lost production becomes greater. The uncertainty related to whether "unforeseen" events will occur is also increased as prototype and novel technology are introduced into an operating environment not encountered in shallow water developments. Furthermore, subsea well system repairs and interventions also become more expensive and are associated with longer delays due to availability and mobilization times for required repair vessels, particularly in ultra deep water environments.