May 8, 2014 by Eric Roach
Since the Offshore Technology Conference is happening, we’ve been discussing offshore quite a bit this week, and I thought I would explore how offshore drilling works.
Being geographically close to the Gulf of Mexico (GoM), I’m going focus my attention there.
Our recent analysis of top oil producing and top gas producing counties included some big offshore areas. Deepwater areas Green Canyon, Mississippi Canyon and Alaminos Canyon were top twenty for oil production in the US (Green Canyon #1 and Mississippi Canyon #3), and Mississippi Canyon was #25 for gas production.
Recently The Lower Tertiary in the GoM has been in the news with huge potential – 15 billion barrels of oil. Compare that to EIA estimated 29 billion barrels in reserve onshore US, and you have a great exploration opportunity.
To Explore and Produce offshore you need a platform (typically referred to as a rig) from which to drill wells, extract product, and in most cases store the oil or gas until it can be transported to refineries or other destinations.
[Drillinginfo’s Terry Childs does a weekly roundup of offshore activity over on Oilpro, and was a huge help in putting this post together. Thanks, Terry!]
Where to drill
The Geology of the GoM is largely Jurassic and Cretaceous, when the basin encouraged collection and evaporation of sea water, leaving behind accumulations of Salt and Gypsum, which then domed and trapped abundant hydrocarbons.
How are leases structured?
The Submerged Lands Act (SLA) of 1953 grants individual States rights to the natural resources of submerged lands from the coastline to no more than 3 nautical miles (5.6 km) into the Atlantic, Pacific, the Arctic Oceans, and the Gulf of Mexico. The only exceptions are Texas and the west coast of Florida, where State jurisdiction extends from the coastline to no more than 3 marine leagues (16.2 km) into the Gulf of Mexico.
State and federal ownership of the seabed:
Beyond the state boundaries in the GoM there are Offshore Protraction Areas that are further subdivided into blocks that go up for bid from the federal government.
According to the following BOEM chart, most of the big money bids were in the 70s and 80s, but sale number 222 in 2012 netted $157 million for lease G34456 in the central district!
What types of Rigs are there?
There are three primary rig types. Jackups, semisubmersibles and drillships make up the majority of the offshore rig fleet and all are used worldwide. Other rig types such as platform rigs, inland barges and tender-assisted rigs are used as well, but they are fewer in number and are generally used in specific geographic areas.
- Jack-ups – Used for shallow water drilling, there are two jackup types; independent-leg jackups make up the majority of the existing fleet. They have legs that penetrate into the seafloor and the hull jacks up and down the legs. Mat-supported jackups are presently used only in the U.S. GoM. As the name implies, the mat rests on the seafloor during drilling operations. Cantilever jackups are able to skid out over the platform
or well location, while slot units have a slot that fits around a platform when drilling development wells.
- Semisubmersibles – Used for deepwater drilling, these floating rigs have columns that are ballasted to remain on location either by mooring lines anchored to the seafloor or by dynamic positioning systems. They are used for both exploratory and development drilling.
- Drillships – Also used for deepwater drilling, these ship-shaped floating rigs move from location to location under their own power. They are capable of operating in more remote locations and require fewer supply boat trips than do semis. They are maintained on location via dynamic positioning systems, and most of the rigs currently under construction are drillships.
- Platform Rigs – These are self-contained rigs that are placed on fixed platforms for field development drilling. Some are called self-erecting and can be rigged up in as little as a few days. Other larger units require a derrick barge to be installed and can take up to two weeks to be rigged up. Once drilling is completed, the rig is removed from the platform.
- Tender-Assist Rigs – There are only about 25 of these rigs left in existence, used mostly in West Africa and Southeast Asia. They are monohull units that are moored next to a platform. The rig is then installed onto the platform, while all the power, storage and other functions remain on the tender.
- Inland Barges – These rigs are specially adapted for inland waters close to shore. They are used in the GoM as well as other areas of the world.
What are the components of an Offshore Rig?
This image shows some of the major components of an offshore semisubmersible rig:
- Hull – initially rigs were built out of tanker hulls, so the terminology remains
- Power Module – converts available fuel into power for the station
- Process Module – onboarding and offloading of supplies and products
- Drilling Module – the traditional drilling rig apparatus
- Quarters Module – where the crew sleeps and eats
- Wellbay Module – access to the well and other equipment
- Derrick – the oil derrick
Who builds Offshore Rigs?
There are several shipyards around the world that build offshore rigs. Most of the major yards are in Southeast Asia and the Far East and there are other facilities in the Middle East and others being established in Brazil. Samsung Heavy Industries in Korea, and Keppel Corporation in Singapore are two of the larger rig builders in the world. .
How are Rigs moved?
Tugboats are used to move jackups and semis for infield moves. When rigs are moved from one geographic area to another, usually a heavy-lift vessel is deployed, commonly called dry-tow. In some cases, semis might be what is called wet-towed, in which the rig is towed while in the water. Of course, drillships move under their own power in any situation. As one can imagine, it can be a pretty big production to move a rig from one area to another – a new rig being built in Singapore will take 90 days to reach the GoM.