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Providing coverage of Alaska and northern Canada's oil and gas industry
October 2006

Vol. 11, No. 40 Week of October 01, 2006

Another offshore production delay for BP

Gulf Atlantis field startup postponed to 2007; subsea equipment modifications, ‘loop currents’ cited as reasons for delay

Ray Tyson

For Petroleum News

Production startup from a second major BP-operated field in the deepwater Gulf of Mexico has been postponed, BP confirmed Sept. 26. Atlantis likely will not see first oil until the first half of 2007, contrary to the previous plan of year-end 2006, the company said.

BP, just a week prior to confirming the Atlantis delay, announced postponement of first oil from its giant Thunder Horse field due to “metallurgical failure” in components of the field’s subsea system, in particular a leaky manifold evidently caused by a bad weld. BP said it would retrieve and rebuild all of Thunder Horse’s seabed production equipment.

A manifold is a massive subsea structure designed to send oil and gas from individual wells up toward the production platform. Thunder Horse and Atlantis manifolds are said to have a similar design.

“As the Atlantis project is at an earlier stage of subsea installation than Thunder Horse, we have already taken the opportunity to retrieve, and make precautionary modifications to the (Atlantis) manifolds, the effect of which has been to move the likely start-up slightly from around year-end to first quarter 2007,” BP spokesman Ronnie Chappell told Petroleum News.

However, another spokesman for the company told Platts Oilgram News that a need to further study ocean currents in the vicinity of the Atlantis development in the southern Green Canyon area led to BP’s decision to postpone field startup until the “second half” of next year. These so-called “loop currents” are prevalent in many deepwater areas of the Gulf of Mexico and can cause serious damage to sub-sea equipment and installations.

Atlantis expected to cost $2 billion

The Atlantis project, covering Green Canyon blocks 699, 700, 742 and 744, is expected to cost around $2 billion. Twenty wells are planned, including 16 producers and four water injection wells. BP owns 56 percent of the development. BP’s co-venturer, Australia’s BHP Billiton, owns the remaining 44 percent interest of the project.

Meanwhile, BP said the Atlantis production facility is now on location in Green Canyon and has been anchored to the seafloor, making the 58,700-metric ton semi-submersible platform the deepest-moored floating production facility in the world. In terms of size, Atlantis is second only to the Thunder Horse platform.

The Atlantis field, which was discovered in May 1998, has a water depth of 7,074 feet. Atlantis’ hull was built in Okpo, Korea, the topsides modules were built in Morgan City, La., and the hull and topsides were married in Ingleside, Texas.

Atlantis and Thunder Horse belong to a group of five major projects that BP has been developing simultaneously in the Gulf of Mexico. Atlantis and Thunder Horse together represent more than 400,000 barrels per day of oil and nearly 400 million cubic feet of gas per day of estimated production.

Specifically, the Atlantis production facility is designed to process 200,000 barrels of oil and 180 million cubic feet of gas per day, compared to Thunder Horse’s 250,000 barrels of oil and 200 million cubic feet of gas per day. In 2002, Atlantis reserves were increased to 575 million barrels of oil equivalent from an initial estimate of around 300 million barrels, making Atlantis the third largest discovery in the Gulf of Mexico. The Thunder Horse field holds recoverable reserves of around 1 billion barrels of oil equivalent, making it the Gulf’s largest-ever discovery.

BP currently produces in excess of 350,000 barrels of oil equivalent per day from nearly two dozen fields in the Gulf of Mexico, including company operated facilities at Na Kika, Pompano, Marlin, Horn Mountain, Mad Dog, and Holstein. BP began deepwater Gulf of Mexico operations in the mid-1980s.






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