Energy Industry
Industry: Email Alert RSS FeedGOM Deep Shelf activity drills to Miocene targets: Ultradeep Shelf estimates compare favorably with other world plays
World Oil, Sept, 2005 by Ian Ashcroft, Victor Schmidt
The US Gulf of Mexico Continental Shelf (GOM) continues to be one of the most active and prolific oil patches available the oil and gas industry. It is a mature area with established oil and gas fields, the world's most complete offshore infrastructure and a history of continuous exploration and development. It is where the oil and gas industry presses the envelope of possibilities and probes the limits of drilling technology.
Most RecentEnergy Articles
- Week in Renewables: Changes Afoot, Solar Growth, Electric Cars and Nukes
- Start Your Engines: Suncor CEO Marks Official "Restart" in Oil Sands Growth
- Pickens: $300 Oil is Still On Its Way
- Energy Efficiency? Over My Cold, Dead Plasma Screen
- Tullow Oil Reels in Shell, Sells Super-Major on Potential Offshore French Guiana
- More »
That quest continues today to locate, drill and test the deeper reaches of the GOM. Bolstered by incentives from the US Department of Interior's Minerals Management Service (MMS), well tests in the GOM Shelf below the 15,000 ft mark are increasing in number and have moved the technology boundary deeper. Now a new frontier is before the industry, a pre-Miocene rock sequence (Fig. 1) under the Shelf that is productive onshore and has tested oil and gas in the deep water, in the outer-most limits of the US Continental shelf. This Ultradeep Shelf drilling target is essentially untested below the regional decollement and salt weld that can vary from 18,000 ft to 28,000 ft below the mudline. According to Wood Mackenzie, the Ultradeep Shelf has the potential to be a new world-class play.
[FIGURE 1 OMITTED]
POTENTIAL
Ultradeep prospect sizes range from 0.5-4.0 Tcfe in recoverable reserves with the average resource likely to be 1.0 Tcfe, Fig. 2. This can be up to an order of magnitude larger than traditional GOM Shelf plays and is comparable to the top international deepwater plays, Fig. 2. Due to the region's established infrastructure, the economic threshold is lower than most international plays. Some mapped prospects have potential reserves of up to 8 Tcfe. Large potential reserves like this are material for the super-majors and can be "company makers" for the smaller independent companies that dominate the shelf.
[FIGURE 2 OMITTED]
ULTRADEEP DRILLING
The challenges of drilling into the higher pressures and temperatures below 18,000 ft have kept the Deep Shelf and Ultradeep Shelf from being widely drilled. Less than 6% (~780 wells) of the GOM wells have been drilled below 15,000 ft, Fig. 3.
[FIGURE 3 OMITTED]
Pressures for ultra-deep tests are expected to reach 30,000 psi with temperatures above 400[degrees]F. Drilling in theses conditions is at the edge of present technology. Evaluating reservoirs at those conditions is problematic because the sensors fail at the high temperatures. Producing from reservoirs with these conditions is not yet possible.
PLAYERS
Positioning for this new frontier began with the first MMS Royalty Relief program in 2001, which opened the Shelf to new exploration by encouraging the industry to accept the challenge of deeper shelf drilling. Now both primary and held-by-production (HBP) leases are open to the royalty relief incentive. This places Apache, Chevron, Forest and Devon in good position because of their existing leasehold. In addition, these companies have added to their holdings with new primary term leases.
The GOM Shelf is generally independent company territory since most of the majors, with the exception of Chevron's properties, sold their shelf properties in the middle-late 1990s to enter the GOM Deepwater play. However, the major oil companies are not out of the running, but are taking-up the ultra-deep drilling challenge. BE ExxonMobil, Shell and BHP Billiton have purchased primary term leases on the shelf and have initiated Ultradeep Shelf drilling programs. Since most of the shelf leasehold is controlled by the independents, the majors are working with the independents to test deeper targets. In particular, Newfield Exploration has been vary successful at promoting its "Treasure Island" and "Treasure Bay" ultra-deep shelf concept areas, as evidenced by the spud of the ExxonMobil-operated Blackbeard West wildcat earlier this year.
ACTIVITY
The majors and some independents are drilling deep wells, Fig. 4, and testing new concepts, but so far they have found little production. This is normal in any opening trend. The deeper rock formations must be cut and analyzed, drilling issues must be overcome, and play concepts must be proven to warrant full-scale investment in a new trend.
[FIGURE 4 OMITTED]
Shell, in partnership with Nexen, drilled one of the first of the ultradeep wells last year. The Shark well in South Timbalier 174-2 penetrated to 25,756 ft, but failed to penetrate the pre-Miocene section. Shell and Nexen had earlier drilled the Fergana well in South Timbalier 239-1, but found no commercial reserves. However, the well did set a record for the tallest self-standing conductor.
Shell's most recent attempt may have penetrated the pre-Miocene section. Partnered by Devon, Total and BHP Billiton, its Joseph well at High Island 10-1 was temporarily plugged and abandoned at the end of June this year. The results remain tight.
ExxonMobil's Blackbeard West, South Timbalier block 160-1, began drilling in February and is still drilling ahead toward a target depth of 32,000 ft and possibly deeper. The well may take another six months to complete. ExxonMobil has plans for up to four more Ultradeep Shelf wells in the vicinity.
Brought to you by CBS MoneyWatch.com
- Best- and Worst-Paid College Degrees
- 6 Things You Should Never Do on Twitter or Facebook
- How Much Sleep Do You Really Need?
- 6 Big Myths about Gas Mileage
Most Recent Business Articles
- Multiple criteria evaluation and optimization of transportation systems
- Multi-criteria analysis procedure for sustainable mobility evaluation in urban areas
- A two-leveled multi-objective symbiotic evolutionary algorithm for the hub and spoke location problem
- Multi-criteria analysis for evaluating the impacts of intelligent speed adaptation
- The development of Taiwan arterial traffic-adaptive signal control system and its field test: a Taiwan experience
Most Recent Business Publications
Most Popular Business Articles
- 7 tips for effective listening: productive listening does not occur naturally. It requires hard work and practice - Back To Basics - effective listening is a crucial skill for internal auditors
- FAS 109: a primer for non-accountants - Financial Accounting Standards Board's "Statement 109: Accounting for Income Taxes"
- Design a commission plan that drives sales - Sales Commissions
- LIFO vs. FIFO: a return to the basics
- Too Young to Rent a Car? - 25-years-old the minimum age for car renting - Brief Article



