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Lloyds List: BP turns Thunder Horse into positive learning experience

British oil major opts for positive spin as production delayed by subsea systems faults, writes Martyn Wingrove, Lloyds List: Published: Oct 31, 2006

BP WANTS to use the lessons it learns at the troubled Thunder Horse project in the Gulf of Mexico to help develop its next generation of projects, including the large Kaskida discovery.

But the British oil major will need contractors to develop subsea equipment that can be deployed in ultra-deepwater environments and cope with harsher reservoir conditions.

BP has been forced to delay first production on the Thunder Horse platform, its key project in the region, until the third quarter of 2008 after finding faults with the subsea systems.

For the London-listed group this is a major setback to its expansion in Gulf of Mexico oil production, so finding a silver lining in tackling technology challenges and making sure these problems do not happen again is the only positive from an otherwise disastrous project.

On the up side this year, BP discovered a substantial oil field with its Kaskida exploration wildcat in ultra-deepwater Keathley Canyon block 292 that promises to become a key project for the future.

BP plans to go back there next year to drill an appraisal well and firm up some of the reserves, but needs to enhance the ability of subsea equipment before a development plan can be formulated.

‘Kaskida is a Tertiary discovery in the Gulf of Mexico that is in ultra deepwater, has a deeper reservoir and with higher pressures than other discoveries in the area,’ said Andy Inglis, BP’s deputy chief executive of exploration and production.

‘It has significant scale, having encountered a net hydrocarbon column of more than 800 ft.

‘Challenges at Kaskida are the deepwater, remote location, the reservoir’s high temperature and pressures and the strong metocean conditions, including loop currents,’ he added.

Mr Inglis said subsea equipment required for developing Kaskida would need to cope with reservoir pressures of 20,000 pounds per square inch and none has been developed yet for these conditions. In comparison the Thunder Horse subsea systems have been developed to tackle 15,000 psi pressures.

‘We need to use the lessons learnt at Thunder Horse so we can go deeper and hotter on our developments. We will apply them to new projects including Kaskida,’ said Mr Inglis.

BP’s other potential projects in the future include its non-operated interest in Shell’s Perdido development and its operatorship of several discoveries including Tubular Bells and Puma.

The Thunder Horse subsea manifolds, originally supplied by FMC Technologies, suffered damage on the seabed because they were sitting there idle while the production semi-submersible was repaired. BP’s lack of confidence in the system’s integrity means new units were ordered from FMC.

‘We presently estimate production at Thunder Horse to start up in the second half of 2008 compared with our earlier estimate of first half of 2007,’ said BP’s chief executive John Browne.

‘The subsea equipment has remained in a cold state, with cathodic protection, on the seabed for some time following the listing of the platform after evacuation during the 2005 hurricane season.

‘We have concluded that these unusual circumstances led to hydrogen embrittlement of the equipment so that it could not perform its intended high pressure, high temperature service,’ said Lord Browne.

BP is changing the metallurgy of the subsea manifolds and has used this experience on the upcoming Atlantis project, which also involves a large production semi-submersible in deepwater.

‘Based on our findings from the Thunder Horse investigation we have also taken the opportunity to retrieve and make precautionary modifications to the Atlantis manifolds. Estimated start-up is now mid 2007,’ said Lord Browne.

Mr Inglis said the modifications on the Atlantis systems onshore should not take too long as they are less intensive than the units for Thunder Horse. They could be reinstalled on the seabed by January.

BP has also secured subsea construction vessels to reinstall the Thunder Horse subsea manifolds early in 2008.

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