Dr. Seuss said it best.
“Oh, the places you’ll go!”
Advances in drilling and production technology have the energy industry dreaming about new offshore exploration frontiers in deeper waters, at greater well depths, at higher pressures and temperatures, in new places around the world.
Production from Chevron’s ultra-high pressure Anchor project in the Gulf of Mexico began in August. It marked the industry’s first production operation rated for pressures of 20,000 pounds per square inch.
Analysts estimated that new operating capabilities for high pressure, high temperature environments could add 5 billion barrels of recoverable oil and gas resources globally. More than 2 billion barrels of that would come from the Gulf of Mexico, thanks to already identified Paleogene resources.
“These advancements have allowed the industry to tap into high-temperature and high-pressure reservoirs especially in the U.S., Guyana, Suriname, Angola and upcoming developments in Namibia, which would not have been possible without them,” said Abhinav Parashar, senior analyst for research and energy intelligence company Rystad Energy.
The $5.7 billion Anchor project is about 140 miles offshore Louisiana at 5,000 feet water depth in the Green Canyon area. According to Chevron, it will consist of seven subsea wells tied into a semi-submersible floating production unit with a design capacity of 75,000 barrels of oil per day and 28 million cubic feet of natural gas per day.
New Tech, Next-Gen Drillships
The company’s new 20,000 psi technology “was subject to stringent verification and validation, an independent third-party review and was ultimately approved by the U.S. Bureau of Safety and Environmental Enforcement,” it reported.
“Chevron is leading the way to unlock ultra-high-pressure reservoirs in the Inboard Paleogene, which have never been produced. The Inboard Paleogene will herald a new chapter in the U.S. Gulf of Mexico,” said Mfon Usoro, principal analyst at energy research firm Wood Mackenzie.
WoodMac estimates that more than 2 billion barrels of oil equivalent could be added to output as companies commercialize discoveries in frontier GOM plays.
“Production from the Inboard Paleogene has the potential to permanently change the landscape in the U.S. Gulf … Success in the play could extend the life of the basin,” Usoro said.
Deeper HPHT offshore projects are in reach today partly because of a new generation of drillships. Transocean’s 8th-generation Deepwater Titan was deployed at Anchor, equipped with two 20,000-psi blowout preventers and five 10,000-psi mud pumps.
With a 3-million-pound hook-load hoisting capacity, the Deepwater Titan can drill up to 40,000 feet in water depths up to 12,000 feet, Transocean reported. Load capacity is crucial because of the enormous drill-string and, especially, casing weights required for deep offshore wells.
Improvements in high-temperature materials and other HPHT equipment also support the expansion of offshore exploration into more challenging areas. Rystad’s Parashar said the industry pushed several key advancements to handle ultra-high pressure (UHP) situations:
- New manufacturing methods:
“Large, heavy-wall forgings, pipes and fittings required novel manufacturing techniques, including the qualification of process valves for specific bore sizes with robust features like nonreturn valves and hydraulic spring-return gate valves,” he said.
- Advanced materials and testing:
“Extensive material and welding qualification programs were conducted. This involved using low-alloy steels and nickel alloys, with additional testing for performance in various harsh environments, ensuring materials met HPHT requirements,” Parashar noted.
- Integrated systems and components:
“The development of integrated subsea systems, such as a 16,500 psi-rated manifold with a multiphase pump module, and innovative subsystems like a flow mixer and pressure equalization circuit, enhanced operational safety and efficiency,” Parashar said.
“New control logic reduced the number of components by using a centralized control module to manage manifold valves and pump systems, simplifying operations and improving reliability,” he noted.
- Advanced pump technology:
“The creation of a helicoaxial multiphase pump with high flow capacity and differential pressure, along with a dielectric hydraulic fluid system for lubrication and cooling, ensured effective performance under UHP conditions,” he said.
“These advancements collectively enabled the industry to manage and operate effectively in ultra-high-pressure environments,” Parashar observed.
According to Chevron, Anchor employs 20,000 psi-rated BOP stacks from NOV and a BigBore lle subsea wellhead system from Dril-Quip. To reduce emissions, Anchor’s floating production unit is an all-electric facility with electric motors and electronic controls, the company reported.
“OneSubsea and TechnipFMC are leading suppliers for 20k psi subsea trees and so far have served clients like Chevron and Shell in the U.S. Gulf of Mexico. Given the new subsea hotspots coming up in regions like Guyana and Namibia, these advancements will support the market to grow,” Parashar predicted.
The Shadow of Deepwater Horizon
Some realities of offshore exploration temper the excitement over the new HPHT ratings. Chevron’s Anchor project won’t operate at 20,000 psi, or close to it. The company has indicated it expects maximum shut-in wellhead pressure at 16,000-17,000 psi.
A public that remembers the explosion and blowout of the Deepwater Horizon in 2010 likely will remain skeptical about the industry’s high-pressure operations, especially in the Gulf of Mexico.
In late August, the Bureau of Safety and Environmental Enforcement announced new regulations and review procedures for oil and gas projects employing novel technology, including HPHT equipment.
In the agency’s definition, an HPHT environment exists when well conditions have pressures greater than 15,000 psi or temperatures greater than 350 degrees Fahrenheit. Reservoirs with HP or HT properties in the GOM are most prevalent in Lower Tertiary and Jurassic Norphlet regions, it noted.
“This final rule is critical to ensuring that the offshore energy industry minimizes the risks of harm to offshore workers and the environment, particularly when it encounters more challenging operating conditions,” said Kevin Sligh, BSEE director.
BSEE’s regulations mandate filing of information to evaluate whether a novel-technology project is economically and operationally feasible. They also add specific equipment requirements based on updated industry standards and require independent, third-party review of operator submissions in certain cases.
When industry comments sought more detail on the updated review standards and procedures, BSEE declined and responded that it intends to consider submissions on a case-by-case basis – possibly signaling stricter oversight.
Unlocking Other Opportunities
Chevron wanted the 20,000-psi operational rating in anticipation of other high-pressure reservoir opportunities in its portfolio, according to industry reports. Not all of those will be in the Gulf of Mexico.
“This is a new deepwater benchmark and will help us produce up to 75,000 barrels per day (at Anchor),” said Kevin Aberdeen, startup manager for Chevron U.S.A.
“Once we set this benchmark, I fully expect it to unlock other opportunities for Chevron that goes beyond Anchor, goes beyond the Gulf of Mexico,” he noted.
In addition to Guyana and offshore West Africa, Rystad cited Brazil and Nigeria as also likely to benefit from new technology advances. But the U.S. Gulf has the industry’s immediate attention for expansion through improved HPHT capabilities.
At least five Lower Tertiary/Inboard Paleogene fields in the GOM, including Anchor, are expected to come online by the end of this decade. Anchor has discovered recoverable reserves of up to 440 million barrels of oil equivalent in the Lower Tertiary Wilcox trend, Chevron reported.
In December, Shell greenlit the go-ahead for its Sparta deepwater development in the GOM Garden Banks area, its first Gulf reservoir with pressures to 20,000 psi. Peak production is projected up to 90,000 barrels/day, with first oil in 2028.
BP recently approved final investment for its Kaskida project, the company’s first GOM development requiring equipment with a pressure rating of up to 20,000 psi. Production is expected to begin in 2029.
“Beacon Offshore Energy’s development in the Shenandoah project will also require such advanced systems. We believe Gulf of Mexico will be the hotspot for 20K psi developments,” Parashar said.
For additional information about Chevron’s new 20K tech, check out this month’s installment of Well Read in this issue.