Investing in Deepwater Fields

David Bamford - Director - Finding Petroleum

Oswald Clint - Senior Analyst - Bernstein Research

Ronald Doherty - Manager Field Developments - INTECSEA

Chris Walker - Chief Geophysicist - Fairfield Nodal

Petromall - Panel Discussion - - Future Energy Partners Ltd

• Bala Nagarajan: Head of Commercial Negotitions team, BDM, Statoil
• David Russell: until recently Technical Director for the OBO Projects Group in BP's Global Projects Organisation
• Martyn Millwood Hargrave: CEO, Ikon Science

Our 3 distinguished contributors will bring their own insights to considering the following:

The discovery of Deep Water Fields has been the target of much exploration spend and even more development Capex, and as a result production from them now represents a significant slice of global non-Opec production.

But today it’s possible to take a gloomy view:

1. Discoveries appear to be drying up, with several high profile dry holes in the South Atlantic for example: perhaps we have simply run out of prime geology?
2. The cost of deep water exploration and appraisal wells has exponentiated: let’s face it, economics goes out of the window if an individual well costs north of $200m!!
3. Development projects are oftentimes way over budget, or late, or don’t deliver the promised production, sometimes all three; under-appraisal of more complex reservoirs seems to be a significant contributor, perhaps connected with 2. above?
4. FPSO-based deep water developments have almost no plateau; they rise strongly and then begin to decline almost as rapidly. Furthermore, most planning assumptions seem to hover around 30-35% Recovery Factors for Deep Water Fields, disappointingly low.

On the other hand, you could take a positive outlook:

1. Exploration has so far simply plucked the “low hanging fruit”. In new provinces and old, more subtle traps await us and the subsurface technology to find them.
2. Better sub-surface imaging will mean we need to drill less wells –fewer exploration dry holes and less appraisal wells.
3. Extending the producing life of individual wells is simply a matter of ‘smarter’ intervention.
4. Fields with more or less the same geology can achieve 60%+ recovery, for example Forties and Magnus Fields in the north Sea, when operating from fixed platforms. We can get there in Deep Water!
5. Much better reservoir monitoring is a key to both 4. and 5. all driven by the 20+ years of experience we now have in Deep Water.

Hence, the question: Is the “Deep Water” era about to End, or are we simply entering into a new Phase?


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