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Lower commodity prices slowed spending worldwide as the oil and gas industry endured some of its toughest times, but offshore oil production managed to continue moving up.
Data from the U.S. Energy Information Administration (EIA) show companies produced more than 27 million barrels per day (MMbbl/d) of oil in 2015 in more than 50 countries, reaching levels not seen since 2010.
“Most offshore production is in shallow waters, which are cheaper and less technically challenging, but there has also been a move toward deepwater projects,” the EIA said in a report Oct. 25. “Exploratory drilling in deeper water is more costly and complex for companies, but technology advancements and the exhaustion of shallower prospects have led companies to explore increasingly deeper waters, particularly in Brazil and in the Gulf of Mexico.”
However, accounting for about 13% of global offshore oil production in 2015, Saudi Arabia leads the pack. The country has the world’s highest-producing oil field, Safaniya, which pumped between 1.1 MMbbl/d and 1.5 MMbbl/d in 2015, according to the EIA.
Other large oil fields offshore are pulling their weight. Among these is the shallow-water Manifa oil field in the Arabian Gulf.
The first phase of operations at Manifa—which is known for its manmade islands, 41 kilometers of causeways and 27 drilling islands—started in 2012. The field, designed to ultimately produce 900 Mbbl/d of Arabian heavy crude oil, has 13 offshore platforms and 15 onshore drillsites as well as water supply wells, injection facilities, multiple pipelines and a 420-megawatt heat and electricity plant, according to Saudi Aramco, the field’s operator.
More oil production could be on tap for Saudi Aramco, which is leaning on technology to boost recovery factors at its major producing reservoirs to 70% and add 100 Bbbl of oil resources.
“At Saudi Aramco, we plan to invest more than $300 billion over the coming decade to reinforce our preeminent position in oil, maintain our spare oil production capacity, massively expand our conventional gas production and exploit unconventional gas resources,” CEO Amin H. Nasser said in October while speaking during the World Energy Congress in Istanbul. His words were shared in a Saudi Aramco statement.
“The industry must ensure a strong financial capacity and greater resilience by altering the underlying cost structure. Greater efficiency, cost competitiveness and integration are critical imperatives,” Nasser added.
Also making waves is Brazil, where the EIA said offshore production grew by 58% between 2005 and 2015. The growth positioned Brazil and its bountiful deepwater presalt assets as the second-largest offshore producer last year.
Brazil’s 2015 offshore startups included Petrobras’ Cidade de Itaguaí FPSO unit in the Iracema North area of the Santos Basin. The first well, 7-LL-36A-RJS, connected to the platform had a daily production potential of 32 Mbbl. Petrobras’ plans include connecting eight producing wells and nine injection wells to the platform, with peak production of 150 Mbbl/d expected by the start of 2017.
The company also marked the start of oil production from P-61 in the Papa Terra Field in the Campos Basin, among others.
The EIA also noted offshore oil production from:
- Mexico, where about 2 MMbbl/d of crude oil was produced offshore. The amount equated to about 7% of global offshore production, but it was down 31% from 2005 to 2015 levels. However, the results of an upcoming deepwater auction in December could change that;
- Norway, which saw its offshore production hold steady after a 28% fall from 2005 to 2010. The EIA forecast Norwegian output to rise in 2016 before dipping slightly in 2017; and
- The U.S., where offshore production increased 6.5% from 2005 to 2015. “With several large projects coming online in 2016 and 2017, the Gulf of Mexico is expected to see production climb by about 0.1 million [bbl/d] in 2016 and by an additional 0.2 million [bbl/d] in 2017,” the EIA said. “By contrast, U.S. onshore production is expected to fall by 0.8 million [bbl/d] in 2016 and by an additional 0.3 million [bbl/d] in 2017.”
Although offshore oil production has increased, it still only makes up about 30% of the world’s crude output. The EIA said production from onshore tight oil plays has grown faster.
“Global crude oil production is expected to remain high in 2016 as many oil-producing nations continue to increase production,” the EIA said.
Velda Addison can be reached at vaddison@hartenergy.com.
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