OFFSHORE

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One of the greatest discovery of 20th century was oil and it has so many applications that it cannot be separated from mankind. The oil exploration started as early as 1900 and the exploration initially was concentrated on land. As the need for oil expanded in an explosive rate, need for finding new discoveries was eminent. Today, crude oil forms a very important part of our lives. During the middle of 20th century, oil discovery started in near shore and medium range of water depth. Although oil exploration and production offshore is more costly than its onshore counterpart, the soaring demand and prices lately have ensured availability of funds to push the limits to deeper waters.

The offshore structures built in the ocean to explore oil and gas are located in depths from very shallow water to the deep ocean. As with any other industry, the offshore industry started initially as an extension of the onshore oil fields on the shores of California. But as the demand went up, the oil companies kept pushing deeper and deeper involving innovative techniques and newer ideas on oil discovery and excavation.

The offshore structures can be loosely divided into three major categories, with some interesting characteristics to each. They are Exploration, Drilling and Production. This is also the sequence for the development of an oil field.

The role of the three sub-categories is very well defined within offshore industry. While most of the structures are designed and built to work for one specific role above throughout their life, some are designed such that they can be used for multiple functions.

Further based on location the offshore structures can be either fixed or floating.

Contents

Offshore structure based on the life cycle of the oil field

Exploration

The whole process starts by the country with prospective oil or gas fields demarcating its territorial waters into blocks. These blocks are then put up for auction. Usually a consortium of oil companies would bid for a block. The consortium then appoints one of the members as the operator company which manages the exploration and production. The profits are, of course, shared by the consortium.

The following would be parties to a typical exploration contract :

  • Owner / Operator : Who has leased the block on behalf of the consortium
  • Licensor  : Who provides the basic chemical engineering know-how for ascertaining the quality of find and thereafter for the refining of the produce.
  • Project Management Consultant (PMC) : An engineering company appointed by the owner/operator that looks after the sourcing of all the engineering inputs. The PMC is also responsible for sub-contracting the jobs and monitoring the performance of sub-contractors. For example the PMC for the RIL's Krishna-Godavri basin project is Aker Kvaener.
  • Sub-contractors : Never stays on one location for too long. It is important for the vessel to be mobile. A ship like structure is ideal for Exploration.

Drilling

Structure mostly a Drill ship or a Semi Submersible is designed to stay on location for as low as one year to as high as ten years, before it moves to a new location to drill and complete new field. The drilling contractor (eg. Global SantaFe, TransOcean, Noble Drilling, etc.) enters into an agreement with the oil companies, also called Operators, to drill wells in a given field within a given time. The cost of drilling is often calculated as Day Rates. The day rates vary significantly on the type of vessel used, length of agreements, drilling conditions, requirement of operators, etc. In recent times, the day rates for some new drilling semi submersibles have touched as high as $600,000 / day. The cost of drilling one well is in the neighbourhood of 15-50 milion USD.

Vessels include jack-up units (jack-up rigs and jack-up barges), semi-submersibles, ships and barges

Production

Structures like Tension Leg Platforms (TLP) and Spar are designed to be permanently installed for the life of the field, generally 20-25 years. There is no requirement for these vessels to be mobile, and are scrapped after the end of the oil field. For marginal oil fields, Floating Production Storage and Offloading (FPSO) platforms are preffered.

A new concept that was used recently is Independence Hub, where a semisubmersible was installed as a hub, with lot of operators using it as a production hub. Small oil fields which were considered un-economical earlier, when exploited individually became economically viable with this system. The oil is pumped using a subsea method, and pumped to this hub, which in turns sends the oil to an existing pipline using Steel Caternary Risers

Independence Hub

Types of Offshore Structures based on location

Fixed Platforms: generally up to 500 ft of water depth

  • Steel template Structures
  • Concrete Gravity Structures

Compliant tower: generally up 500 ft of water depth

  • Compliant Tower
  • Guyed Tower
  • Articulated Tower

Floating Structures: generally greater than 500 ft of water depth


A relatively new field of Offshore oil and gas industry is Sub sea. A sub sea generally does not required a host platform (if the field is not very far from the shore) and the gas/oil pumped from the sea bed is directly connected to existing pipelines, and pumped to the shore.

The greater the water depths, generally, greater the dangers of extracting oil. Today, the deepest exploration well drilled in the industry is at close to 10,000 ft water depth, however the deepest production well is only close to 6,000 ft. The major oil companies are very nervous to go to higher water-depths, since the amount of investment to risk ratio becomes too high. However, many oil companies are interested in going for deeper waters.

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