Deepwater's potential outweighs its many challenges: oil and gas from deep water have great potential to help meet the ever-growing U.S. energy demand and drive Dominion E&P's growth. The company's extensive Gulf of Mexico deepwater lease portfolio affirms its belief in that potential.

Publication: Oil and Gas Investor

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COPYRIGHT 2005 Hart Publications, Inc.

The Gulf's deep water already has begun to confirm the wisdom of that commitment. The region's contribution to the U.S. energy supply is growing at a fast pace, and the Gulf has become the heart of global deepwater oil and gas exploration and development.

Deepwater oil production in 2003 was an estimated 1 million b/d, according to the U.S. Minerals Management Service (MMS). Natural gas from deep water was about 1.42 Tcf. The agency expects deepwater oil production to reach 2.25 b/d, nearly 80% of total Gulf production, by 2011.

Challenges: Some new, some familiar

"Obviously, the industry is headed into deeper and deeper water," said Rick Fowler, project manager during sanctioning, now general manager of deepwater development. "Dominion E&P is already a partner in discoveries in water depths around 8,000ft [2,440m] deep."

Still, deeper water means many of the technical challenges faced to date will become more severe. Designing and managing the steel catenary riser (SCR) that brings pipelines up onto a floating platform, for example, is critical, Fowler said. Structures must be designed to withstand a 100-year storm when subject to the heavy weight of the SCR.

The weight of a deepwater mooring system also becomes an issue in several thousand feet of water. There is a limit to how long a mooring line comprised of wire and chain can be without exceeding a floating platform's capacity. New synthetic mooring lines, with adequate strength but much lighter, will help increase the water depth capability of floating structures.

"Flow assurance is likely to 'always be an issue," Fowler said. "We're finding some of the deeper reservoirs contain more asphaltenes that will require special chemicals to maintain flow."

As flow distances increase--both in subsea pipelines and up through risers in very deep water--paraffin in the well stream and the risk of hydrate formation will pose flow problems.

"Industry is now drilling wells in 10,000ft [3,050m] water depths, and as development begins there, flow assurance will be an area where we need some technology to help us," said Jim Abercrombie, senior vice president and general manager, western business unit.

Handling wax, asphaltenes and paraffin will be a challenge, as will dealing with well streams containing sulfur. Sulfur is usually associated with heavier crude and has not yet been a problem, but higher sulfur levels are likely as new discoveries are made.

New technology and sophisticated equipment have helped deepwater drilling clear some high hurdles on its way to today's temporary limit of more than 10,000ft of water. Water depth, however, is not the only issue....

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