Petrochem/Utilities Industry Trends

Q&A with API's Coordinator of Drilling and Production Operations on Increased Deepwater Production Through Acceleration of Standards and Technologies

Issue Table of Contents

Heading into Deeper Waters - New Technologies Make Deepwater Exploration and Production Possible Deepwater Standards Initiative Streamlining the Development and Approval Process Q&A with API's Coordinator of Drilling and Production Operations on Increased Deepwater Production Through Acceleration of Standards and Technologies API and Global Engineering Documents - Better Together

Deepwater offshore technologies have made it possible to find billions of barrels of oil that were inaccessible in the past. Until recently, the maximum production depth was around 1,500 feet. Now producers are finding it economically productive to go up to 10,000 feet in some cases. The U.S. Department of Energy estimates that deepwater technologies currently provide access to as much as 25 percent of the total U.S. domestic oil and natural gas production…and that number is growing.

"There is going to be an enormous increase in deepwater drilling. Technological advances and the fast-tracking of vital industry standards have made it possible to forge ahead with deepwater exploration and production much more quickly," comments Tim Sampson, the American Petroleum Institute's (API) Coordinator of Drilling and Production Operations and a professional who has been in petroleum engineering for over 20 years. The largest part of Sampson's job today is working with an industry steering committee in the facilitation and development of voluntary standards and practices. In the following interview, Sampson explains how API and others view drilling opportunities, the need for accelerating the deepwater standards process and where the industry will be in the future.

GLOBAL: How would you describe the current state of the offshore drilling market?

SAMPSON: We have a large number of leases, particularly in the deepwater Gulf of Mexico and over the next few years those leases are going to be developed.

GLOBAL: Has deepwater exploration played a role in the rebirth of the industry?

SAMPSON: Yes, from a domestic standpoint. We're going to continue to drill in deepwater and some of the reservoirs we're finding in deepwater hold a tremendous potential for development. I suspect in the next few years we will be producing a significant percentage of the domestic oil and gas supply from our deepwater facilities.

GLOBAL: Can you talk a little about technological advances throughout the exploration, drilling, and production operations?

SAMPSON: We've been producing oil and gas from offshore for over 50 years now. We started out small and shallow. We produced in shallow waters with fixed platforms, and the deepest fixed platform we have is in about 1,500 feet of water. As we started moving into deeper water, industry developed new technology and we started using tension leg platforms, compliant towers and subsea completions.

One technology that we have developed standards for and the industry is planning to use in the Gulf of Mexico is called Floating Production Storage Offloading Facilities (FPSOs). Many of them look like a ship and the oil and gas is produced using subsea systems on the ocean bottom. The oil is brought to the FPSO through umbilicals or risers where the oil is processed, stored, and then offloaded to shuttle tankers to be taken to a refinery. There are actually about 70 of these in service around the world, but none in the United States. We are working with the Minerals Management Service (MMS) and the U.S. Coast Guard to be allowed to use FPSO technology domestically.

GLOBAL: What is the demand for deepwater rigs?

SAMPSON: Drilling rigs are keeping very busy. Shallow rigs see less activity. Deepwater rigs are being leased by companies for several months at a time and they're very expensive to operate. For example, the day rate for a deepwater drilling rig could be as much as $200,000.

GLOBAL: Can you explain the complete process from drilling and exploration to production?

SAMPSON: Before you put a production facility in place, such as a tension leg platform or a FPSO, you contract for a drilling rig (a drill ship or semisubmersible drilling rig), which will drill wells in as deep as 10,000 feet of water. Once you've proven that it is an economically viable field, you initiate the process to put the predetermined production facility in place. You can either place a subsea facility and pipe the crude oil or gas back to a production location - as many as 50 miles away - or you can have a facility at that location, recognizing that you may drill additional wells out there. The facility can be a fixed platform up to 1,500 feet. Or, for deeper waters up to 10,000 feet, you're going to need a tension leg platform, compliant tower, subsea completion or an FPSO.

GLOBAL: Let's talk about your work with standards.

SAMPSON: Historically, API has worked with government agencies to develop standards. For the last decade or more, the government has been required to use industry standards wherever possible before creating something new in their regulations. For deepwater development, we work closely with the MMS, the government agency responsible for oil and gas development in offshore federal waters. A number of years ago, API and MMS put together a suite of standards for shallow water, which covered safety systems for platforms, high-pressure piping, offshore structures design and others.

GLOBAL: How did the Deepwater Standards Initiative come about?

SAMPSON: As we started moving into deeper water, we recognized that some of the standards we were using were applicable, but others needed to be reexamined. For example, in deeper water there are different pressures, temperatures and other elements. API agreed to assist MMS and the U.S. Coast Guard in identifying the standards needs and priorities and fast track the updating of the standards. We call this the Deepwater Standards Initiative. As a result, we've put $500,000 into research and hiring contractors and consultants to expedite the standards writing process. Initially, we identified about 16 standards that needed to be accelerated. Standards that typically take several years to complete were started a little over a year ago and we've already completed and published nine of them.

GLOBAL: What do these standards relate to?

SAMPSON: They're primarily design standards. For example, API 2SM is a standard on the design of synthetic mooring systems. A mooring system is not unlike an anchor system and chain that you have on a bass boat. A mooring system is the same concept for a floating offshore drilling rig, but you have several anchors and lines running from the facility. Imagine the weight of a mile or longer anchor chain or line. Synthetic mooring lines are lighter and more versatile for use in a deepwater situation. Also, API RP 2FPS is the world's first design standard for floating production systems.

GLOBAL: You mentioned that other industry associations were involved in creating these standards. Who are they?

SAMPSON: Yes, the International Association of Drilling Contractors, the National Oceans Industry Association, DeepStar, Offshore Operators Committee and the Independent Petroleum Association of America are all very active on this initiative. These organizations include oil and service companies as well as offshore oil and gas development organizations - all bringing their own expertise and unique perspective to the table.

GLOBAL: On what standards are you currently working?

SAMPSON: Some of these standards and issues apply not just to deepwater but also to shallow water operation. Let me list a few:

• One of them is cementing practices. When you drill a well and set the casing you actually put cement in the well bore so you don't have oil or gas coming up on the outside of the pipe. We have a broad industry committee working on guidelines to be used to apply best cementing practices in shallow and deepwater situations.
• We have a committee that's working on updating guidelines on well control (RP59). They're expanding a document developed in the 1980's to make it applicable for a deepwater situation.
• We just published a document on diverter systems (RP64). It's an update of a document that we had for the shelf, out to about 1,500 feet, and we have expanded it so it is applicable for a deepwater environment.
• We're looking at fire protection for offshore facilities. Specifically, the new document will provide guidelines for designing your facility with safe fire parameters for a deepwater setting.

GLOBAL: How do you view the long-term potential of deepwater oil and gas production?

SAMPSON: The domestic oil and gas production sector of the industry is making and will continue to make significant investments in deepwater Gulf of Mexico development for the foreseeable future. The potential is great!