US operators, government officials and academics push deepwater technology to solve supply problems.

A consortium of producers, research organizations and government agencies has initiated a fast-track campaign to raise funds for ultradeepwater drilling and production research and development (R&D) activity in the Gulf of Mexico.
Consortium members suggested US $5 billion in government funds might be in the right neighborhood, compared with about $50 million a year now spent.
The Offshore Technology Program (OTP) already has come out with a road map of technologies and techniques it will need to reach and produce oil and gas in waters deeper than 5,000 ft (1,525 m). Early this year, it mounted a high-velocity campaign to get the money to put those goods and services to work.
The urgency stems from abnormally high winter fuel prices and the resulting public outcry that puts mounting pressure on the newly elected president and Congress to remedy supply restrictions.
Chances are the group will try to exert some leverage on new President George W. Bush, as well. That idea arose from potential involvement by the National Petroleum Council (NPC), a group of 175 executives from large and small producing companies, oil and gas service companies, universities and financial and legal organizations. Walt Rosenbusch, who had only 7 days remaining as director of the Minerals Management Service at the time of the OTP meeting, said the benefit of the NPC is that it is an existing, high-profile group. The new administration would be able to point to NPC backing as a reason for its support of the proposals.
Delegates also pointed out that if industry goes to Congress to look for funds, the effort is self-serving. If industry, government and academia propose this new approach, it is in the best interests of national security and national economic growth.
Behind the OTP effort are two major assumptions. First, any effort to increase onshore production in the Lower 48 states will do little more than slow the production decline. Second, the ultradeepwater Gulf of Mexico has the potential to provide as much oil and gas as the North Slope of Alaska. Development is moving forward, but not fast enough to meet rising demand.
The Energy Department started a series of workshops in July 2000 with industry and research groups to come up with ways to speed that development. Two key, missing elements, it found, are money and technology.
The risk imposed on the first-time use of new technology is a major barrier to accelerating deepwater technology applications, and the government could help by absorbing some of that "bleeding-edge" risk. The workshops also determined investors are reluctant to put money into R&D projects outside the sweet spot - the $10,000 to $5 million range, far less than the hundreds of millions of dollars need for an ultradeepwater demonstration program.
Workshop delegates came up with the road map of technological needs. One of those needs was accelerated reservoir exploitation. One subcategory was reservoir property verification. Under that subcategory, the group wanted low-cost microdrilling and a self-contained fluid and rock sample retrieval system to be developed by 2002.
By 2003, the group wanted alternative subsalt remote sensing and imaging technology in that subcategory. Finally, it wanted a final reservoir exploitation design by 2004.
Other subcategories under accelerated reservoir exploitation are subsea gathering systems and reservoir monitoring and control with shelf field trials to begin in 2004 and ultradeepwater field trials to begin the following year.
Another category is rigs/reach/riserless. The top-ranking subcategory is riserless drilling systems. Under that subcategory, the group wants to develop a system concept and materials and placement research this year and conduct critical component development and testing next year.
In 2003, it wants to deal with system integration and alpha testing, with shallowwater testing in 2004 and deepwater trials in 2005.
Other subcategories under rigs/reach/riserless are systems integration for drilling, high-capacity production wells and intervention systems.
Still another category is energy to market. On top of that list is the huge subsea processing and flow assurance subcategory. This year, the group would like to examine acoustic liquefaction, membrane separation, hydrate formation and potential for hydrate transportation. In 2002, the area would be subsea processing architecture and interface definition, followed by critical component design and testing in 2003. The following 3 years would take care of system integration and testing, offshore shelf field trials and ultradeepwater field trials.
The other subcategories under energy to markets are hydrocarbon conversion to clean fuel, feedstock and products, and offshore power generation and transmission.
Throughout the timetable, the group listed environmental management as a category. This year, it planned to work on sequestration of greenhouse gases. The second category with a timetable stretching through the next 5 years is well control with near-zero spill volume.
Supporting all of these categories is one more category, high-intensity design, which includes the computer technology and organization needed to convert the down-on-paper technology road map into action. This category includes the use of computers and digital tools for virtual system design and operation, including measurements of virtual production in relation to organizational goals.
That category - computer optimization of the process of producing oil and gas in ultradeep water - holds the key to savings of at least 50%.
It involves nearly all of the key components of an ideal ultradeepwater production system, including advanced reservoir decision-making, remote power supply systems, subsea and subsurface communications, materials, seafloor chemical process engineering, remote-control drilling, wellbore stabilization, advanced separation and the simultaneous transport of solids, liquids and gas.
Delegates to the OTP also talked about ways to get the items listed in the technology road map past the talking stage and into the action stage.
They decided meetings should be held on neutral ground, so it wouldn't appear that the effort was a single-organization operation and that the operating organization should be headquartered in Houston, Texas, to attract the largest number of active members.
As one delegate said, "This can't be one of those groups where you put up $30,000 and attend one meeting a year."
It should include representatives from all government agencies that deal with oil and gas, the 15 Department of Energy national laboratories and chief executive officers of production and service companies.
A key point was that the market should drive the technology. The group should not waste time or money on technology that customers in the marketplace would not buy. That restriction infers risk analysis, cost-benefit analysis, a planned path for commercialization and possibly incentives for early use of the new products derived from the R&D.
Funding should be modeled after the existing Energy Department programs. In other words, the delegates like the idea of shared funding between the government and industry as a way to reduce risk on new projects. Typically, federal programs have supplied no more than half to total project costs.
The group expected to coordinate its efforts with existing programs, including the Deepstar deepwater research program and possibly research efforts from the European Union and Petrobras.
The group also favored government shared-funding techniques as a way to develop and test systems and hardware.
Said Tom Williams of Maurer Engineering, government help allowed Maurer to develop the first measurement-while-drilling applications, the first medium-radius horizontal wells, the first PDC bit, the first high-temperature turbodrill, the first micro-drilling motor and the first high-pressure coiled-tubing motor.
"Those would not have been possible without government help," he said.