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US: Pioneering vessel clears a Gulf hurdle
HOUSTON
Petroleumworld.com, April 30, 2008
Brazil's Petrobras moved a step closer Tuesday to bringing the Gulf of Mexico its first-ever floating production and storage tanker.The Interior Department's Minerals Management Service, which oversees oil and gas activity in the U.S. waters of the Gulf, approved development plans from Petrobras and its partners — Oklahoma City-based Devon Energy and France's Total — to use the vessel to produce oil and gas from two fields in one of the Gulf's deepest regions.
The agency still must approve a more detailed deep-water operations plan for production to start in the Cascade and Chinook fields about 250 miles south of New Orleans.
But Tuesday's go-ahead for use of a floating production, storage and offloading vessel to do it was a necessary milestone, said Mike Griffin, Devon's deep-water development manager for the Gulf.
"It's another step toward getting to first oil," he said, which the companies expect in 2010.
Such vessels, known as FPSOs, are used for offshore production in areas where underwater pipelines don't exist. Petrobras has a fleet of FPSOs off Brazil, and the vessels are widely used off West Africa. Exxon Mobil Corp. uses the world's largest FPSO at one of its offshore Angola fields.
Where pipelines can't reach
The Gulf's extensive undersea pipeline network rendered FPSOs unnecessary until companies started venturing into deeper waters where pipelines don't reach.The Cascade-Chinook fields are in a 300-square-mile ancient rock layer known as the Lower Tertiary trend.
Interest in exploring that trend rose sharply when Chevron Corp. in 2006 completed an exploration well in its Jack field near the Cascade-Chinook fields.
Geologists estimate that the entire trend could hold 3 billion to 15 billion barrels of oil.
Caution upfront
Companies are still assessing how to reach oil in the trend. Griffin said the FPSO will allow Petrobras to "use some caution upfront" by seeing how production goes without first investing billions for a floating oil platform and a pipeline to carry oil to a network closer to shore.If satisfied with results using the FPSO, the companies can consider more permanent infrastructure.
"We'll benefit from what we learn at Cascade by seeing how the wells produce, and it will help us understand the reservoirs," Griffin said.
Avoiding a storm
Lars Herbst, regional director for the MMS' Gulf of Mexico region, said the Cascade-Chinook project will be the first production from deep discoveries in the trend's Walker Ridge and Keathley Canyon areas. Chevron's Jack and St. Malo discoveries are in Walker Ridge, and BP's Kaskida is further west in Keathley Canyon.Herbst also noted that the FPSO can move out of the way of an oncoming storm, unlike moored platforms.
Matt Pickard, an analyst with Quest Offshore, said the potential to use other FPSOs in such remote areas of the Gulf is "pretty huge."
"It's essentially an early production system," Pickard said. "If an FPSO proves to be quicker and more economical, you could see the use of them dramatically increase."
Petrobras and Devon are 50-50 partners in the Cascade field, while Total is Petrobras' minority partner in the Chinook field. Petrobras will operate both fields.
Petrobras declined to comment on the MMS announcement Tuesday.
Story by Kristen Hays from Houston Chronicle
-kristen.hays@chron.com
Houston Chronicle 30 04 08
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