|
Deep drilling rush puts the squeeze on operators ExxonMobil, Apache, Devon, Anadarko, BHP Billiton among companies looking to drill deep gas wells on Gulf of Mexico’s outer continental shelf Ray Tyson Petroleum News Houston Correspondent
Operators with deep gas prospects in the relatively shallow waters of the Gulf of Mexico’s outer continental shelf could drill as many as 18 exploration wells over the coming months to geological depths greater than 18,000 feet.
The deepest well likely would be drilled on the ExxonMobil-operated Blackbeard prospect. That well could go as deep as 38,000 feet, just a few thousand feet short of the world record of around 40,000 feet.
However, ExxonMobil isn’t the only operator with designs on the so-called “ultra-deep” zone below 25,000 feet, a new frontier area on the shelf where huge gas reserves are thought to exist.
BP, a partner in Blackbeard, also is said to be discussing with contract driller Rowan the possibility of drilling a separate 35,000-foot well on a yet undisclosed prospect on the shelf.
Independent producers Apache, Devon Energy, Anadarko Petroleum, WT, Arena, McMoRan, as well as Australia’s BHP Billiton, also have deep-shelf plans on the table, Rowan said, adding that BHP is currently talking to the company about drilling a 32,000-foot well. Rowan has drilled about two-thirds of ultra-deep wells Rowan has drilled about two-thirds of all the wells thus far in the U.S. Gulf in excess of 18,000 feet.
“There is a lot of discussion going on with operators right now about these ultra-deep wells,” said Danny McNease, Rowan’s chief executive officer.
However, the biggest challenge facing deep-shelf operators now appears to be securing the specialized drilling equipment and steel pipe necessary to withstand the extreme pressures and temperatures in the ultra-deep zone.
“Exxon wouldn’t have gone out six months ahead of time and contracted a rig if they weren’t concerned about getting the right rig to do the job,” McNease said of the Blackbeard prospect. “Rigs that are available that can actually drill these type wells play a big role in when they actually do start.”
ExxonMobil and partners BP and Petrobras will be shelling out between $28 million and $35 million to secure a Rowan rig capable of drilling to untested depths of nearly 40,000 feet at Blackbeard in the Treasure Island area. The rig is contracted for a practically unheard of 350 days with drilling to commence by year-end or in the first quarter of 2005.
“As people drill deeper and deeper wells, it takes longer and longer to drill those wells. So those rigs are going to be tied up longer,” McNease said. Noble holds off on major capital projects However, based on the lack of success so far among the few operators who actually have ventured into the ultra-deep, Noble Corp. is one contract driller that is less than thrilled about joining the party.
“Early results are underwhelming,” said James Day, Noble’s chief executive officer. “Results have not been very good. But I hope it works for obvious reasons. It pulls rigs out of the marketplace.”
He said that Noble does not like to invest in major capital projects on plays that have not been proven, favoring instead to chase a “sweet spot of proven geology” in such places as West Africa and the deepwater U.S. Gulf.
But if the geology on the shelf proves itself, he added, Noble could upgrade existing rigs with larger pumps and other equipment required to drill in to deeper zones on the shelf.
“We’re going to be quick to change if there is a string of successes on the deep shelf,” Day said. “We’ll pull the jack-ups in and it will take a lot of time and effort. And it will take a little money to put in big pumps and stiffen up the derrick. Those are all expensive undertakings.” Steel pipe for ultra-deep wells an issue Rowan said it expects another 11 to 16 drilling rigs to depart the U.S. Gulf, unless day rates improve. There are 92 rigs of various classes currently available in the Gulf, down 10 from a year ago, according to rig monitor Baker Hughes.
McNease said that because of extreme depths and other unknowns, deep-shelf operators also are being caught flat-footed when it comes to the type of steel pipe required to do the job.
“People really didn’t know what kind of casing they were going to need for these wells,” he added.
Despite predictions that more drilling rigs will leave the U.S. Gulf in search of better day rates, oil and gas prices are expected to remain strong through 2005, as well as capital spending, McNease said.
“Our Gulf of Mexico customers continue to post record cash flows,” he said. “Gulf of Mexico budgets appear to be holding firm with a projected 10 to 15 percent increase.”
| 