Subsea Group Products and

Services

Unit 02 Subsea: past and future

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Lecture

Topics
1. History of the sector
2. World records
3. Global Energy Review
4. Industry trends

On successful completion of this unit you will :

• Understand where this industry is coming from
• Have a knowledge of the today industry limitations
• Understand the market drivers
• See where this industry is going in the future

Unit  02  Slide 2 Subsea Group Products and Services 2014
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 1) History

Topics
1. History of the sector
2. World records
3. Global Energy Review
4. Industry trends

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Technology Development History

Unit  02  Slide 4 Subsea Group Products and Services 2014
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 First Onshore Oil Discovery

On 26 August 1859 an historical event: the first on land oil

discovery by Colonel Drake in Titusville Pennsylvania
(USA) 50m below ground

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Early Offshore Developments

Pioneering offshore wells in California in late 1890 early 1900

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 Beach in Los Angeles in early 1900

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Offshore Industry 1900 to 1946

Expansion worldwide :
• Maracaibo lake : hundreds of
platforms built in concrete and later
in steel
• Caspian Sea (Baku)
• United States of America: Lake
Caddo (Louisiana) , Lake Erie ,
expanding in the bayous of
Louisiana and later close to GOM
shore

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 First Offshore Oil Discovery in 1947
ƒKerr-McGee discovered oil in the Gulf of Mexico (block 32),17km offshore
on September 9,1947
ƒOil was encountered at a shallow depth (1500 ft to 1700 ft)

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Platform Technical Evolution 1950 to 1970 (1/3)

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 Platform Technical Evolution 1970 to 2000 (2/3)

This has been the conventional Offshore field development for 40 years

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Platform Technical Evolution Summary (3/3)

300‐400m

500‐600m

500m – 1,600m 600m – 3,000m 200m ‐ 3,000m 50m ‐ 3,000m

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 First Subsea Wells early 1960’s

ƒ First Subsea Well installed in 1961 ƒ Expansion in Santa Barbara

in the Gulf of Mexico on West Channel (California) and GOM
Cameron Block 192 by 16m water with circa 70 Subsea Wells
depth installed at the end of 1960’s

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1970’s to 2000’s: The Growth

ƒ World wide expansion :

ƒ 1971 in North Sea
ƒ 1974 in Brazil
ƒ 1978 in Australia…..

ƒ From single subsea tie-backs

to multiple wells subsea tie-
backs

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 From 2000 to today: The Solution

ƒ Mature Solution fully

recognized worldwide
ƒ Large number of subsea wells
ƒ More and more complex
ƒ Deeper
ƒ Longer tie-back distance
ƒ Technically : subsea
processing

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From Mobil Beryl (1975) to BP Quad (2014)

BP QUAD-204 UK(West of Shetland)

400m of Water

MOBIL Beryl UK
100m of Water

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 2) World Records

Topics
1. History of the sector
2. World records
3. Global Energy Review
4. Industry trends

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Deep Water and Ultra Deep Water

500m ---------

1,500m -------------------------------------

Ultra Deep Water

3,000m ----------------------------------------------------------------------------

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 World Record in Drilling today

DP drilling : ONGC-Transocean
Dhirubhai KG1(India) 2012
~3,165m water depth

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World Record in Horizontal Drilling today

Longest reservoir drilled :Chayvo well

Exxon Sakhalin (Russia) 2012

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 Deepest Subsea Wells in service today

Shell Tobago (Gulf of Mexico) , in ~2,925m of water, is the

world’s deepest subsea completion (2010)
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Longest Tie-back in service today

Statoil Snovhit (North Sea Norway in 316m WD), is the world’s longest subsea
tie-back with 143km distance to host (2009)
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 Deepest Floater in service today

Conoco Magnolia Gulf of Mexico in 2003

circa 1,500m Water Depth

Shell Perdido Gulf of

Mexico in 2009 Independance Hub Gulf of Mexico
circa 2,500m Water in 2007
Depth circa 2,500m Water Depth

Petrobras Cascade Chinook Gulf of Mexico in 2009

circa 2,500m Water Depth

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Deepest Floater future

- Shell (100% operator) to develop

Stones Field in GOM by 2,900m
wd by 2016
- F.P.S.O. from 2 subsea satellite
wells with additionnal 6 wells+
multi-phase pumping to be
connected later
- Gas piped to shore
- Oil exported by tanker

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 Longest Pipeline in service today

Blue Stream is the longest pipeline with 2x24” 1,213km (2003-12)

Through Black Sea with deepest part in 2,150m wd
Operated by GAZPROM and ENI

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3) Global Energy Review

Topics
1. History of the sector
2. World records
3. Global Energy Review
4. Industry trends

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 Demand for Oil 2013-2030

Oil demand (1%/year)

40mbd
60mbd

Existing production
(decrease of 4.5%/year)

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Acceleration of Upstream Spending

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 Spending Growth 2013-2030

Unit  02  Slide 29 Subsea Group Products and Services 2014
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The Oil Companies

International Oil Companies National Oil Companies

IOC : International Oil

Companies
Chevron, Shell, EXXON, BP,
Total…

Others Oil Companies
NOC : National Oil Companies
Petrochina, Petrobras, Sonangol
Group, Petronas…

Others : AHL, Anadarko, BG,

Apache…..

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 Balance between IOCs and NOCs

Unit  02  Slide 31 Subsea Group Products and Services 2014
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CAPEX Costs Indicator

230 in Q4/2013

- Local content
- QHSE
- Drilling vessel cost
- Access to human resources
- Goods and services costs
- Shipyard cost
- Deepwater technology

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 Project Costs “Explosion”

Total Girassol Angola 2001

WD Rate Nbr Well Km pipe Km Reserves Costs Innovation

m Kbbl/day umb Mil. bbl Bil. $
1,250 200 39 78 77 700 2.88 Riser Tower

Total Pazflor Angola 2010

WD Rate Nbr Km Km Reserves Costs Innovation

m Kbbl/day Well pipe umb Mil. bbl Bil. $
1,200 220 49 180 84 590 9 Subsea Separation

Unit  02  Slide 33 Subsea Group Products and Services 2014
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Project Costs “Explosion”

Total Girassol Angola 2001

WD Rate Nbr Well Km pipe Km Reserves Costs Innovation

m Kbbl/day umb Mil. bbl Bil. $
1,250 200 39 78 77 700 2.88 Riser Tower

Total Pazflor Angola 2010

WD Rate Nbr Km Km Reserves Costs Innovation

m Kbbl/day Well pipe umb Mil. bbl Bil. $
1,200 220 49 180 84 590 9 Subsea Separation

Unit  02  Slide 34 Subsea Group Products and Services 2014
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 Project Costs: TOTAL Girassol 2001
FPSO
Drilling 600 M$
900 M$

Riser tower

UFL (Umbilicals Flowlines)

500 M$

300 M$
SPS (Subsea Prod Systems)
Unit  02  Slide 35 Subsea Group Products and Services 2014
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Project Costs: TOTAL Pazflor 2010

Drilling 1,600 M$
FPSO
2,500 M$

UFL (Umbilicals Flowlines) IPB

2,000 M$
Subsea Process

1,300 M$
M$
SPS (Subsea Prod Systems)

Unit  02  Slide 36 Subsea Group Products and Services 2014
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 Some Projects cancelled

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Major Projects delays announced in 2013

Unit  02  Slide 38 Subsea Group Products and Services 2014
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 Changing Oil Companies Attitude

ƒ Global Exploration and Production spending continue to grow

ƒ Slowdown Exploration and Production spendings by Majors(IOC)
offset by National Oil Companies(NOC) and Independants
ƒ Capital Discipline , cost cutting and cost control
ƒ New way of doing business

Unit  02  Slide 39 Subsea Group Products and Services 2014
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Subsea is “the Way to Develop Field”

Unit  02  Slide 40 Subsea Group Products and Services 2014
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 Unprecedented Growth in Subsea
Circa 500SSWH / year

Circa 400SSWH / year

Unit  02  Slide 41 Subsea Group Products and Services 2014
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4) Industry Trends

Topics
1. History of the sector
2. World records
3. Global Energy Review
4. Industry trends

Unit  02  Slide 42 Subsea Group Products and Services 2014
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 Unit  02  Slide Subsea
43 Subsea Group Products and Services 2014
Group Products and Services
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Key Oil & Gas Regions

Deepwater has driven the occurrence of most of the large new discoveries with the golden
triangle

-Pre-Salt Brazil
Gulf of
-Pre-Salt West Africa
Mexico
-East Africa : Oil: 5-7 Bbl
Gas: 10 Tcf**
Mozambique,Tanzania,Kenya
Gulf of
-French Guyana
Guinea
-Israel,Norway Oil: 8-10 Bbl
Gas: 9Tcf**
-Artic.. to come next
Brazil
Oil: 10-15Bbl
Gas: 5-8 Tcf**

Unit  02  Slide 44 Subsea Group Products and Services 2014
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 Pre-Salt: Brazil / West Africa

Unit  02  Slide 45 Subsea Group Products and Services 2014
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Other Significant Discoveries

Anadarko and ENI giant gas field 30Tcf each

in circa 2,000m wd
Unit  02  Slide 46 Subsea Group Products and Services 2014
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 Fixed Platforms: Some Exceptions

Shell Bullwinkle GOM by wd 412m

77,000tons( 50,000t jacket/2,000t
topsides/10,500t piles/12,500t conductors),
529m high,1988 Statoil Troll Norway by wd 303m
683,000 tons concrete, 472m high,1998

Unit  02  Slide 47 Subsea Group Products and Services 2014
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Platforms in Deepwater

4 floating systems have been extensively used worldwide:

- SPAR
- TLP
- Semi Submersible
- FPSO
Unit  02  Slide 48 Subsea Group Products and Services 2014
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 Floaters in service today

18 SPAR 24 TLP

47 SEMI 156 FPSO

and circa 10,000 fixed platforms
Unit  02  Slide 49 Subsea Group Products and Services 2014
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Offshore Programs 2013-2018

260 floating
7 SPAR
11 TLP
13 SEMI
125 FPSO
36 FSO
68 others

and

1,200 fixed

Courtesy of McDermott

Unit  02  Slide 50 Subsea Group Products and Services 2014
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 Aging Subsea Wells Fleet
Producing Subsea Wells
(Average age of wells in years)

1,745
(11.8)
4,846 wells
752
(8.5)
391
(10 years)
1,040
918 (7.4) (9.4)
(11.2)

Source: Quest Offshore Resources Inc., February 2013

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Unit  02  Slide 52 Subsea Group Products and Services 2014
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 Everything Subsea

Unit  02  Slide 53 Subsea Group Products and Services 2014
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FLNG The Game Changer

Typical gas development
Export Pipe+LNG plant onshore

FLNG solution
(no export pipeline , no LNG plant)

Unit  02  Slide 54 Subsea Group Products and Services 2014
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 Some Incredible Vessels

Unit  02  Slide 55 Subsea Group Products and Services 2014
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Dockwise Blue Marlim

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 Decommissioning: Pieter Schelte

Unit  02  Slide 57 Subsea Group Products and Services 2014
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Review of Unit 02

• The World needs low oil prices to have countries growth to

restart

• The World needs high oil prices to produce difficult oil

Go to Unit 03
The cure to high price is high price

Unit  02  Slide 58 Subsea Group Products and Services 2014
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