Offshore Canada's harsh-environment operators are ready for anything.

As Brazilian activity reaches record levels, Enterprise Oil plc is set to spud the first of 15 wells in the Bijupirá and Salema fields and become the first foreign operator to commercialize production in the Campos Basin offshore eastern Brazil.
The British independent plans to add 65,000 b/d of crude oil to Brazilian production by 2003 and help the nation move closer to its goal of energy self-sufficiency.
Formed in 1984 after British Gas was privatized, Enterprise Oil is a rarity in today's oil industry. It ranks as the United Kingdom's fourth-largest operator, Italy's biggest foreign producer and one of Norway's top 10 oil companies. Enterprise also holds interests in more than 100 blocks in the Gulf of Mexico. And in Iran, it will join Petropars in developing the giant South Pars field. It has estimated reserves of 1.4 billion boe, while its 2000 production averaged 281,000 boe/d.
Operations
Enterprise has set its sights on becoming a long-term player in Brazil. "With the break-up of Petrobras' monopoly, many foreign operators, especially those with a deepwater appetite, entered the Brazilian marketplace," Martin Macfadyen, director of Brazilian operations, said. "Our entry took place 2 years ago. We have a 25% holding in BCe-2 in the Ceará Basin in northeastern Brazil. Our partners are Amerada Hess, with a 16% interest, and Petrobras, with a 59% operating share.
"We also have a 15% stake in BC-2 in the Campos Basin. TotalFinaElf is the operator with a 35% share, Petrobras holds 35%, and Shell has a 15% interest. Bijupirá and Salema provide us with the perfect foundation from which we intend to grow a significant E&P business in Brazil."
Overview
Discovered by Petrobras in 1990, the twin fields of Bijupirá and Salema have recoverable reserves of 147 million boe. The fields are in the Campos Basin some 174 miles (280 km) from Rio de Janeiro. Water depths range from 1,575 ft to 2,887 ft (480 m to 880 m). Enterprise - as the operator - owns a 55% share in the field. Petrobras controls 20%, and Odebrecht has a holding of 25%. The crude oil produced from these fields is relatively light - 28° API and 31° API, respectively - and is deposited in an Eocene-age Carapebus sandstone formation.
Petrobras implemented a pilot program to develop the fields from 1994 to 1999. One of its first actions with the entry of foreign competition in the Brazilian market was to prioritize the development of certain assets. It considered Bijupirá and Salema marginal and farmed out their development. Petrobras made the original seismic data available, and Enterprise geologists reanalyzed the survey.
"This is a marginal project, no doubt, but we firmly believe that our skills and the appliance of technology in areas such as directional drilling and reservoir modeling and management will allow us to create new value. Enterprise's modus operandi is cost-effectiveness and efficiency," Macfadyen said.
The British operator plans to start drilling in late July and complete the project by the end of August 2003. That plan calls for 15 wells, 10 on Bijupirá (102 million boe total reserves) and five on Salema (45 million boe total reserves). It will use artificial lift to raise reservoir fluids to the surface while maintaining reservoir pressure with seawater injection wells.
Under the project plan, Enterprise will drill six production wells at Bijupirá. These will be complemented by four water-injection wells, which will enhance production. On Salema, it will drill three production wells and two water-injection wells. It will tie back all 15 wells in the subsea development through manifolds to the floating production, storage and offloading vessel (FPSO). The FPSO facility will have an oil-processing capacity of 70,000 b/d and a storage capacity of 1 million bbl.
Enterprise has allotted capital expenditures of US $600 million for the project, with drilling and FPSO costs accounting for a third of the investment. It projects average field operating and workover costs at less than $20 million per annum. Total unit lifting costs, excluding royalty payments, are in the region of $6/boe.
It based its costs on the full benefit of tax exemption on import duties and tax incentives on investment. Without these incentives, costs would have risen to prohibitive levels.
Contracting
The correct contracting and project management philosophy is vital to the commercialization of Bijupirá and Salema. That philosophy covers front-end engineering loading, cost-effective drilling technology, enhanced oil recovery and secondary production techniques.
"It takes a lot of work to make marginal fields economically viable. Enterprise has been very careful in selecting its contractors," project director Ron Bryans said. "Our small management team has a high degree of confidence in our suppliers delivering within the pricing and time schedule agreed."
Bob Lyons, drilling manager, spoke about project management. "Enterprise has a traditional way of doing things. We coordinate operations but expect full input from our contractors. Technical expertise is the key, but cost is important, too. We have a good record of delivering on time and within budget. Having good relations and communications with our contractors helps meet targets.
"For example, Diamond's drilling crew on the Ocean Yorktown are predominantly Brazilian. We have stipulated that key personnel are bilingual. We have done this in Italy, and it works well," Lyons said.
"Additionally, there aren't many service personnel with experience of the Campos Basin. Both our contractors and partners are helping us by transferring knowledge from previous operations in Brazil."
Baker Hughes holds the primary drilling contract for Bijupirá and Salema. It will supply measurement-while-drilling, logging-while-drilling, drilling, wireline logging and coring services.
Said Trevor Burgess, Baker Hughes vice president of technology, "We are working closely with Enterprise and the other service contractors to plan and drill these wells. Our best-in-class technologies and the ability to work effectively in project teams will help us achieve the drilling and production goals set by Enterprise as well as to contain costs."
An important aspect of the development of Bijupirá and Salema is optimized well placement and directional drilling. Andergauge is working with Enterprise and Baker Hughes Inteq to design optimal bottomhole assemblies incorporating cost-effective and fit-for-purpose technology.
"Andergauge learned a long time ago to export only the best. We have supplied new tools for Petrobras and are doing the same for Enterprise. Our management and staff are highly capable and will help reduce Enterprise's drilling costs. We are also adding value by transferring experience from the Congo Basin, West Africa, which shares many geological features with the Campos Basin. We are pleased to be working with Enterprise and consolidating our position in Brazil," said Malcolm Greener, Andergauge chief executive officer.
Support
Support for Enterprise's operations requires a substantial supply base. The Vitória Offshore Logistics (VOL) Consortium will handle logistics through a base in Vitória in the state of Espírito Santo. Further infrastructure in Vitória is being created. Baker Hughes is building a drilling fluids processing plant, and BJ Services is constructing a cement facility.
"The site offers ample space at competitive prices. Our requirements were different from many operators as we are developing a field rather than drilling one or two exploration wells. The general willingness on behalf of the VOL Consortium and the Espírito Santo state government to attract new business to the area convinced us to set up logistics base in Vitória," Macfadyen said.
During the prequalification process, Enterprise managers visited facilities in the neighboring states of Rio de Janeiro and Espírito Santo. They looked at docking facilities, the availability of storage space, the quality of infrastructure offered and the accessibility to berthing for large supply boats. From Vitória, Enterprise will transport operational equipment and supplies offshore.
The Ocean Yorktown - a semisubmersible owned by Diamond Offshore - was scheduled for release by Petrobras in June. The long horizontal sections planned for Bijupirá and Salema will require Diamond Offshore to upgrade the Ocean Yorktown. It will fit the vessel with a fourth diesel generator, a third mud pump to generate additional hydraulics and a TDS 4 top drive to supply extra torque. The company also will increase the accommodation area and make general improvements. Upgrades to the semisubmersible will take place in the Fels Setal shipyard in Angra dos Reis, Rio de Janeiro.

Comments