|
Breaking the ultra-deep barrier Shell could be first to surpass 25,000 feet on Gulf’s continental shelf Petroleum News
The race is on among a handful of companies looking to become the first explorer on the Gulf of Mexico's outer continental shelf to break the so-called ultra-deep barrier, where no drill bit has gone before.
It appears Shell has a leg up on BP and El Paso Exploration & Production with its 26,000-foot South Timbalier 174 wildcat, begun during the first week of September and expected to take about 118 days to complete from spud. The well would penetrate the new frontier horizon at roughly 25,000 feet, an arbitrary but generally accepted demarcation line where deep is said to meet ultra-deep.
Explorers will have to deal with a host of challenges below a geological depth of 25,000 feet, most notably intense heat and pressures that can damage drilling equipment. Poor seismic imaging at those extreme depths also will make it difficult to locate targets.
But the financial rewards could be huge as companies search for new and larger natural gas reserves on the Gulf's continental shelf, one of the most exploited hydrocarbon regions on earth. It’s now believed the same mammoth structures that have produced large discoveries in the Gulf’s deep waters extend beneath the shelf and its relatively shallow water depths.
El Paso, one of the most active and successful deep-shelf explorers, is currently drilling a well to around the 25,000-foot level. The well was spud at South Timbalier 214 during the third week of September and was expected to take up to 180 days to complete, according to Rowan, El Paso's contract driller.
BP looking for ultra-deep target BP said it is still looking for an ultra-deep prospect to drill on its vast 116-block Treasurer Island acreage, which it shares with joint venture partner Newfield Exploration. The acreage covers areas of South Timbalier, Ship Shoal and Eugene Island. Operator BP had planned to spud the well this fall but apparently has not yet contracted for a rig, although Rowan said it has been talking to the major about using one of its high-end jack-ups, possibly a Super Gorilla or one of its new Tarzan-class rigs. BP has not disclosed the well's exact target depth. But it's believed the company would be aiming below 30,000 feet, according to sources. BP also is facing a deadline. If the company does not spud a well by year-end, some of the Treasure Island leases would revert to Newfield under terms of their joint venture agreement.
“In our joint venture with BP, we're in a prospect generation mode,” Elliott Pew, Newfield’s vice president of exploration, said at the recent RBC Capital Markets energy conference in Houston, Texas. “For each of these prospects, the reserve potential is in the trillions of cubic feet. They are large structures but very risky.”
Analysts believe that because of the extreme geological depths, an ultra-deep well on the Gulf's continental shelf could range up to $50 million or more, depending on whether problems are encountered down hole.
The deepest well ever drilled in the Gulf of Mexico was on the ChevronTexaco-operated Tahiti deepwater prospect in Green Canyon, according to the U.S. Minerals Management Service. Drilled in less than 4,017 feet of water depth, the well touched down at 26,200 feet below the ocean floor.
The planet’s deepest well was a scientific experiment to study the earth's crust. It was drilled to a depth of nearly 40,300 feet on Russia’s Kola Peninsula.
Deep-shelf incentive starts at 15,000 feet As might be expected, the deeper one goes on the Gulf’s continental shelf the fewer wells have been drilled. Of the roughly 46,080 wells in water depths up to 600 feet, 7,133 were below a measured depth of 13,000 feet, 2,810 below 15,000 feet and 426 below 18,000 feet, according to MMS.
For the purpose of qualifying for government incentives, MMS has established the entry point for deep-shelf drilling at 15,000 feet and below. Under the program, companies pay no federal royalties on the first 20 billion cubic feet of production, provided natural gas prices stay within price thresholds.
Clearly, explorers were forced to go deep as reserves and production at more conventional geological depths began to shrink. In fact, the mean pool size for a discovery on the shelf has plummeted from 528 billion cubic feet of gas equivalent prior to 1960 to less than 27 bcf of equivalent today, according to MMS. From 1997 through 2002, annual gas production dropped from 4.76 trillion cubic feet to 3.36 tcf.
Deep-shelf exploration as a portion of total exploration wells drilled on the shelf has rocketed from 5 percent to around 20 percent since 1970, with an average reserve size of 34 bcf of gas equivalent.
El Paso’s inventory of shelf prospects demonstrates the potential for deep drilling. Of the company’s 46 prospects situated between a geological depth of 15,000 and 22,000 feet, potential reserves range from 35 bcf to 750 bcf of gas equivalent, with a mean of 250 bcf of gas equivalent. That represents gross potential reserves of nearly 11.5 tcf of equivalent on El Paso's deep leasehold alone.
|
