The deepwater industry has to find and be producing an additional 10 MMb/d of oil within seven years to meet forecast global energy demand.

With a predicted 27 MMb/d in total of additional output needed by 2020, the stark reality is that the offshore sector overall is expected to supply around 62% of the required oil and gas reserves, according to John Gremp, FMC Technologies’ Chairman and CEO. He was speaking at the Society of Petroleum Engineers’ annual technology conference in New Orleans, in the event’s opening plenary session entitled ‘Deepwater Exploration and Development – Challenging the Limits’.

Key challenges and opportunities include accessing new reserves, accelerating production, increasing reservoir recovery rates and reducing total costs, he said. Specifically discussing accelerated production, Gremp highlighted the need to shorten system lead times, and improve production optimisation and flow assurance technologies through advances in subsea processing, such as seabed separation and boosting. “The really compelling argument is that it does so much. It reduces costs, increases recovery, and becomes an enabling technology,” he told delegates. He also stressed that the drive to reduce project costs should see the industry strive to optimise field lay outs, increase equipment standardisation and improve system availability.

The panel’s focus was also on deepwater field recovery rates, currently running at around half the rate of onshore fields. According to another speaker, John Hollowell, executive VP, deepwater, for Shell Upstream Americas, frontier plays will require technological advances in High Pressure/High Temperature (HP/HT) equipment and enhanced recovery. “Facilities of the future are going to be more complex than we have now. The ability to have more ‘eyes’ on the facility itself, controlling things from the beach, will be important,” he said. “Enhanced recovery methods, like artificial lift and improved oil recovery technologies, will be needed from first production.”

He also flagged up the importance of projects such as Shell’s ongoing Lower Tertiary projects including its ultra-deepwater Stones FPSO development in the GoM, where it is also evaluating its Appomattox and Vito discoveries. Holloway commented: “Projects are deeper, more complex. That’s exciting, but there’s a lot to play for. The Auger field has been there producing for 20 years, then we find another 100 MMbbl sitting right underneath it using new technology.”

Richard Ward, president, completions and production at Baker Hughes, highlighted the industry’s goal to obtain Lower Tertiary recovery rates of more than 20%, compared to the estimated 10% that fields will yield with natural flow. In the GoM, he said, development capital expenditure will grow by 12% annually, with around $20 billion a year to be spent by the end of this decade. “By 2020 more than 8,000 oil wells are expected to be operated subsea,” he added. “And that’s counting only new fields.”

Enhanced oil recovery is critical for the deepwater US Gulf, agreed Lars Herbst, GoM regional director at the Bureau of Ocean Energy Management, Regulation, and Enforcement (BSEE). “It’s a reliability question. A piece of equipment on the sea floor has to be totally reliable,” he said.

Herbst went on to stress the GoM’s resurgence post-Macondo and the enforced moratorium, with 17 new deepwater rigs due to enter the region between now and the end of the first quarter of 2014 alone. A total of 10 deepwater GoM projects have been sanctioned and are in development, while another eight are under appraisal, he added.

Offshore