Approach Redefines Ideal Project Scope and Facilities Size for Field Development
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This paper investigates how decisions made through reservoir evaluation and drilling-and-completion planning affect the design of subsea production systems and, in turn, the design of production hosts. Practical alternatives are explored by challenging the current approach to project framing and definition. Rethinking the requirements of deepwater-field development will help define the proper size of the subsea and surface facilities, the optimal design life, and the possible need for staged developments.
During the past 2 years, the offshore industry has looked with increasing interest, and undeniable concern, to practical and effective ways to reduce the capital expenditure (Capex) of deepwater projects.
Looking at the three main components of a deepwater-field production infrastructure—host, subsea production system including export, and subsea wells—the host offers the greatest opportunity for Capex reduction. Cost reduction is achievable by optimizing the subsea production system and by adopting new technologies and practices for the construction of subsea wells, but a more relevant cost reduction is possible in principle by properly sizing the host. This, in turn, requires rethinking the way deepwater projects are sanctioned and contracts between local governments and operators are negotiated.
The fact that over capacity exists in offshore hosts is well-documented. Less evident, but still convincing, is the fact that several subsea tiebacks, successfully conducted over the past decades across the world, were possible only because a host already existed nearby that had available process or storage capacity.
Sometimes, overdesigning a host may not be avoidable because of the limited time the operator has to develop and produce the offshore fields. If contracts were structured in a different way and the operators had the chance to operate the offshore field for a longer period, it might have been possible to use smaller hosts and subsea production systems, thus reducing both Capex and operational expenditure (Opex).
Project Framing and Host Sizing
Overview. Before a deepwater project starts its life cycle, and then periodically during the cycle, reservoir engineers and drilling-and-completion engineers study and determine the optimal way hydrocarbons can be recovered. Subsequently, wells and completions are designed to achieve this goal. The decisions made within these disciplines become part of the basis-of-design document that is the starting point for other disciplines tasked with the design of the host and the subsea production system.
Engineers working on the design of a host or a subsea production system may not be aware of the reasons dictating given oil or gas throughputs or expected water-production levels. At the same time, reservoir and well engineers may not realize the effects of their decisions regarding the design of production infrastructure—for example, repositioning the tophole location of subsea wells or modifying well flow rates or compositions. Typical key decisions a project team has to make are
- Quantity and types of required subsea and surface facilities
- Size of processing equipment, host structure and topside, and subsea-production-system main components
- When facilities will be needed and expected duration of service
When the wells begin depleting and overall production begins declining, secondary- and tertiary-oil-recovery methods may be required to sustain production and to ensure that the processing equipment on the host topside can operate within the predetermined operational parameters. Subsea tiebacks may be considered as a way to use the existing, unused processing or storage capacity. Because these subsea tiebacks are not originally planned, extensive brownfield work may be required to ensure new subsea wells are connected to the host safely. Usually, brownfield work at topside and subsea is quite expensive. In addition, brownfield work might require interrupting production, which, in turn, would result in financial losses for the operator.
An aging host requires the implementation of a proper integrity-management process. Inspections are needed periodically. Engineering work and repairs may be required to ensure that the host remains fit for purpose during its intended field life. Field operations are typically concluded when it is no longer profitable to produce hydrocarbon from the field. This happens mostly because the volume of produced hydrocarbon diminishes over time, while the amount of produced water and produced gas to be handled increases. When Opex exceeds the value of the produced hydrocarbons, production usually is shut down.
Staged Projects. Developing offshore fields in two or more stages a few years apart is a practical way to reduce the risks associated with a large full-field development.
To further reduce the initial Capex, a subsea architecture may be adopted in which standalone drill centers are added independently, one or more at a time.
The first stage of a deepwater project might use an early-production system (EPS) with reduced processing and storage capability. This is beneficial to the project because it hastens arrival of the first-oil date and allows the operator to begin learning about the reservoir’s features and performance. This information enables a better and more-informed decision on the subsequent stages of the project. An EPS is financially effective because of its limited size. In general, smaller hosts may be a more sustainable way to develop deepwater fields.
Benefits of a Smaller Host. The criteria typically adopted in framing a deepwater project and in sizing host and subsea infrastructure are a relatively short field life and a large processing (and storage, as applicable) capacity for the host. Challenging these well-established criteria may not be easy, but reducing the size of a host and producing for a longer time are likely to bring the following benefits:
- Project Capex is smaller for both host and subsea production systems.
- The reuse of part of the subsea production system in future stages is possible, thus reducing overall Capex.
- Opex is lower because the host to be maintained is smaller.
- Longer production time is possible because of the lower Opex, so greater recovery from the reservoir can be achieved.
- Risks are reduced. Before sanctioning a subsequent stage, necessary information is available to make an informed decision.
Late-Production System. A late-production system may be a novel concept to be investigated further because it appears to provide the following benefits:
- A tailored processing capability is defined on the basis of the data collected during the earlier field life.
- A smaller oil-treatment section is required with larger—and possibly expandable—water and gas sections.
- Less oil-storage capacity is needed.
- The number of personnel on board is reduced.
- Opex is lower.
- Greater recovery of hydrocarbons from the reservoir would result from a reduced Opex sustaining operations longer.
Ideally, the subsea production system should be designed for a rapid replacement of the full-field-development host with the late-production system. Both the subsea field layout and the design of risers and umbilicals need to take this late-life activity into account.
Longer Field Life. The size of the production facilities and the field life of the offshore development are strongly related. The link may not be evident because past and current deepwater projects tend to have a limited life, during which accelerated production is achieved by means of large processing units installed on sizeable floating platforms.
Assuming that new contracts may be signed with local governments and with contractors, and accepting a reduction in the host size, it can be seen how longer field lives are possible. So far, longer design lives have been associated with very large projects. In the future, smaller projects might also have very long field lives. The offshore industry should look at the small, low-productivity onshore wells that produce very limited amounts of oil over time.
This paper challenges the common ideas and practices ingrained in the offshore industry. The objective is to start rethinking the way deepwater projects are defined, sanctioned, and executed. The current approach may not be viable, and alternatives may have to be explored. The financial, technical, and environmental-sustainability objectives of deepwater projects might be met by reducing the size of the hosts and keeping them in operation for longer. The main conclusions of this study are
- Capex and Opex reduction may be more achievable and more relevant by focusing on the host rather than on the subsea production system or the subsea wells.
- Operating smaller offshore facilities will result in a longer field life that, in turn, will require operators to rethink how production-sharing agreements are structured.
- Timed replacement of the host might have to be considered as a possible way to produce larger amounts of hydrocarbons in better operational conditions. In particular, the feasibility of late-production systems should be investigated further.
- Hosts might have to be leased rather than purchased by the operator, to ensure that the host is removed from the field when its intended life is concluded.
- The new approach is not free of risk. In light of potential benefits associated with smaller hosts producing for longer, measures to identify and mitigate these risks should be studied.
Approach Redefines Ideal Project Scope and Facilities Size for Field Development
01 October 2017
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