With a number of deals in this resource class already approved in 2017, including BP’s Mad Dog 2 in the Gulf of Mexico (GoM) and Statoil and Total’s recent deals in Brazil, deepwater projects look set to feature large in boardroom investment decisions over the next few years.

At a recent floater conference in Norway oil and gas consulting services and business intelligence firm Rystad Energy suggested structural cost-cutting in the deepwater market was set to make offshore projects competitive with U.S. shale.

The firm said cost reductions and refinements in deepwater developments offshore have brought breakeven prices down to between $56 and $58 per barrel in Europe and the Americas. According to Rystad partner Lars Eirik Nicolaisen, a continuation of the reduction in shale’s breakeven operating costs of more than 50% over the past two years was “unsustainable”— with costs set to rise as the industry recovers.

So it seems inevitable that operators will increasingly look to target resources from deeper, more remote offshore plays characterized by their complexity, higher risk and often challenging reservoir fluids.

High-risk finds

Developing deepwater fields is a costly and complex process. Taking into account transportation, manpower, qualifications and infrastructure costs, capex has historically been much higher than onshore developments.

At the site itself appraising and producing new hydrocarbon reserves means contending with increasingly harsh downhole conditions. Designing and operating equipment that can withstand these hostile environments is difficult. In deepwater plays where operators are dealing with colder temperatures, higher pressures and longer tiebacks, specific flow assurance challenges that negatively impact production are particularly pronounced.

Presenting a high risk to production, gas hydrates are ice-like structures comprising water and gas. In a relatively short period of time, hydrates can plug up lines and disrupt production, causing a potentially hazardous pressure buildup. They are particularly problematic in deepwater regions where pressure gradients and low fluid temperatures promote formation. They also are a major issue in remote frontier developments where pipelines are routed along the seabed over long distances. Yet the temperature does not have to be below freezing for hydrates to occur. They have been found offshore Western Australian and in the Arabian Gulf. And remediating hydrate formation when it occurs is even more problematic considering deepwater wellbores and flowlines are harder and more expensive to access.

A common approach to suppress hydrate growth is to inject thermodynamic inhibitors such as methanol or monoethylene glycol (MEG). Methanol is batch-dosed, while MEG is usually injected continually into pipeline fluids.

Timely, accurate analysis of the concentration of these inhibitors is essential, particularly for remote deepwater developments where the infrastructure is large and complex and even the smallest issues, if not addressed, can have devastating consequences.

The benefits of being able to analyze concentrations quicker onsite include avoiding costly chemical wastage and optimizing startup procedures by monitoring methanol transition times from tiebacks, while MEG gives visibility of whether reclamation and regeneration units are performing as they should.

Gas chromatography equipment—traditionally used for testing—often is not available onsite. This means samples must be flown long distances for testing and analysis onshore, an expensive option where results are not available for days or even weeks.

The presence of methanol and MEG reduces the quality and value of produced fluids and can cause problems further downstream during processing and refining. Separation difficulties and the poisoning of catalysts and molecular sieve beds are just a few.

To protect from lost time and income due to damages, refineries and terminals often impose limits on the acceptable level of hydrate inhibitor.

LUX Assure’s OMMICA is designed to provide fast, precise methanol and MEG analysis onsite, regardless of geography and complexity. As a cost-effective capex alternative that offers results as accurate as gas chromatography in as little as an hour, OMMICA is a low-risk, simple colorimetric onsite chemical testing kit. The technology often is used to complement gas chromatography which, as a traditional technique, has its drawbacks, including maintenance issues, especially when these sensitive instruments are used offshore. In contrast, OMMICA, which analyzes residual methanol or MEG concentrations in produced water, crude oil and condensate, has many advantages over gas chromatography.

In deepwater or remote regions the technology saves operators significant time and money by replacing expensive sample testing as well as consequential lengthy turnaround times, with onsite capability to make near real-time decisions.

The technology also provides simple setup and user independence. It has the potential to deliver a transformative effect on the economics of deepwater fields.

The efficacy of the portable technology proven at Statoil’s Mongstad refinery is often used to correlate gas chromatography results elsewhere. It works by using reagents that only react with the chemical it is designed to assess and is added directly to samples without the need for a manual water separation step.

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