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COPYRIGHT 2005 Hart Publications, Inc.
Early revenue is important, but so is long-term performance. To the extent that early understanding of the reservoir allows, decisions made in the beginning months and years of a field's life must optimize the producing asset's lifecycle value.
Actions taken during field development--placing wellbores in the best position in the reservoir, sizing facilities to meet current and future needs, and myriad other large and small decisions--are critical.
What makes achieving these goals a special challenge is that some of the most important decisions must be based on the limited information gathered during the short period of prospect analysis, exploration and appraisal drilling. The understanding of the reservoir possible at that early stage is bound to evolve during the life of the field.
In deep water, where cost and revenue potential are super-sized, the stakes are high.
From marginal to viable
The fact that two independent exploration and production companies--Dominion and Pioneer--could find, develop and produce a series of reservoirs that initially did not appear commercially viable says much about today's competitive environment.
Along the way, this partnership implemented ideas that made smaller developments work economically.
"We can be proud of drilling cost-effective wells and finding commercial reserves in these water depths," said Jim Abercrombie.
While vice president of offshore production, Abercrombie was deeply involved in getting Devils Tower on stream. Now, he is senior vice president and general manager of the western business unit.
"This project involves very complex reservoirs and well completions. Getting it all to work is a tribute to the people and skills we have, and the technology, that is available," he said.
Devils Tower showcases the ability of today's independent to compete in almost any arena, Abercrombie said.
"I believe very firmly that, given today's technology and skilled service providers, there is a pretty level playing field now among the deepwater players. Companies like Dominion E&P can hold their own against almost any kind of competition," he said.
The unique arrangement to operate the Devils Tower spar but not own it is an example of the innovative thinking that allows independents to compete. Lowering the capital requirements for the producer makes projects more financially viable and lowers the field-size threshold.
"It's an approach I think we will see more of," Abercrombie said. "Fields much smaller than Devils Tower are coining on stream and are very commercially successful."
Getting started
The process of putting Devils Tower on stream was typical of what might be expected for a large, costly, complex project. Being "typical" also means dealing with unexpected challenges, of which Devils Tower had its share--construction setbacks, extreme weather and the inevitable surprises that accompany any record-setting effort.
Still, it says much about the state-of-the-art of deepwater development that most elements of the project were accomplished in a way that could--in a relative sense--be described as "routine."
If construction had gone as planned, the timeline from discovery to production would have been one of the shortest for Gulf deepwater projects. Construction delays stretched that timeline by almost a year. Even then, time to production was still about average for such developments, because a very aggressive original schedule made it possible to set a brisk pace during early stages of the project.
"Time from discovery to sanction was very quick, compared with other projects," said Rick Fowler. The Devils Tower project manager during sanctioning, Fowler now is general manager of deepwater development.
"It was...
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