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Vol. 13, No. 25 Week of June 22, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

BP’s Thunder Horse oil field goes online

U.S. Gulf’s largest discovery producing after delays; just one well online; commissioning will be after steady state production

Ray Tyson

For Petroleum News

The BP-operated Thunder Horse field, the largest-ever oil discovery in the U.S. Gulf of Mexico, is finally onstream and headed toward higher production following repeated startup delays dating back to 2005. First oil was achieved June 14 from a single well, BP confirmed.

“We have a lot yet to do as we prepare other wells for production and continue to drill and complete other wells,” BP spokesman Ronnie Chappell told Petroleum News June 17.

The Thunder Horse platform, on a multitract development in the vicinity of Mississippi Canyon Block 822 in water depths of up to 6,050 feet, is capable of producing 250,000 barrels of oil per day and 200 million cubic feet of gas per day.

However, Thunder Horse’s actual “production profile” hinges on “well performance” and “how fast we are able to drill and connect new wells,” Chappell cautioned.

“We are making good progress,” he added. “First oil is an important milestone on the way to startup of the Thunder Horse field. We will be ramping up production in the coming months.”

Formal startup later

BP will announce the formal startup of Thunder Horse when field “commissioning” is finished and “we … achieve steady state operations,” Chappell said.

The Thunder Horse field was discovered in 1999, and was designed to use the largest production drilling semi-submersible platform in the world. The platform weighs more than 50,000 tons and will produce from some of the highest temperature and highest-pressure wells in the Gulf of Mexico.

Thunder Horse and its estimated 1 billion barrels of recoverable oil became the development centerpiece for a massive pipeline system serving Thunder Horse and other large BP discoveries in the deepwater U.S. Gulf, including Atlantis and Mad Dog.

However, Thunder Horse development has been plagued with problems over the years, causing not only startup delays for Thunder Horse, but also for Atlantis due to concerns over the integrity of subsea equipment.

BP’s headaches began in 2003 when development drilling was temporarily suspended after a marine riser separated between a drilling rig and a production well about 6,000 feet below the ocean surface. The Transocean rig was drilling BP’s ninth development well at Thunder Horse when the riser separated in what industry experts said was a rare occurrence.

Initial startup set for ‘05

Thunder Horse missed its initial 2005 startup when Hurricane Dennis swept through the U.S. Gulf, purportedly causing damage to the platform and causing it to list 20 to 30 degrees, according to BP. However, the U.S. Minerals Management Service all but dismissed Dennis and its high winds as the cause of the listing. Nevertheless, BP postponed Thunder Horse production into 2006.

Later BP told analysts in a conference call that leaks in the manifold system would delay first production from late 2006 into early 2007, but didn’t specify the cause of the damage. The manifold, built by Houston-based FMC Technologies, is a massive subsea structure designed to send oil and gas from individual wells up toward the production platform. Reportedly, the structure could have been damaged during Hurricane Dennis.

One industry analyst theorized that the leaks might have come from “hydrogen embrittlement” of the welds, with the hydrogen coming from seawater that seeped in through cracks in the insulation. The insulation then may have been damaged as the manifolds, insulated in 2004, sat unused for an extended period on the sea floor.

Startup again was delayed when a series of tests revealed “metallurgical failure” in components of the field’s subsea system. As a precaution, BP said it would retrieve and replace all the subsea components it believed could be at risk. The company said the work would be done over the next year but did not expect first production from Thunder Horse before the middle of 2008. Analysts believed the fix would add tens of millions of dollars to the project. The production facility alone cost more than $1 billion.

Just a week after announcing its final startup target for Thunder Horse, BP announced postponement of first production from Atlantis, from year-end 2006 to the first quarter of 2007. Because the Atlantis project was at an earlier stage of subsea installation than Thunder Horse, BP said it had already taken the opportunity to retrieve and make precautionary modifications to the Atlantis manifolds. Production was actually brought online in October 2007 from a facility designed to process 200,000 barrels of oil per day and 180 million cubic feet of gas per day.

BP owns 75 percent of Thunder Horse and ExxonMobil 25 percent, while BP owns 56 percent of Atlantis and Australia’s BHP Billiton owns 44 percent.

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