Growing numbers of subsea wells in increasingly deeper waters will continue to drive the market for well intervention capabilities. Infields’ James Hearn outlines the market.
Depleting oil and gas reserves within established shallow water areas and rising global energy demand over the past decade has led to oil and gas operators pushing the boundaries of exploration into ever deeper and more challenging waters.
This drive toward deeper waters has led to significant new discoveries and has been one of the key industry trends of recent years.
Infield Systems forecasts that this deepwater trend is likely to continue for the foreseeable future, as the industry expands into new frontier regions, such as South and East Africa and the South China Sea. The ever-increasing movement of offshore activities toward deeper waters has been driven by technological advances, particularly in the subsea production industry.
Subsea technology has helped unlock huge reserves of oil and gas, and reduced costs to develop deepwater fields.
There are more than 5,000 subsea wells in operation globally. Current growth in the number of subsea wells being installed shows no sign of abating and helps to fuel the need for associated services, such as subsea well intervention.
Well intervention remains an emerging market and is not yet common practice in many regions, with the exception of the North Sea and US Gulf of Mexico. However, as the operational base of subsea wells increases recovery rates from subsea wells are typically 10-30% lower than platform-based wells— there is a key need for operators to improve recovery through the use of well intervention techniques.
On a global basis, the majority of well intervention activities are carried out in shallow water areas, and this demand mirrors the operational base of global subsea wells, with areas such as the North Sea containing a significant number of wells. Consequently, the region has the most developed well intervention market.
Future growth in intervention demand is anticipated to be driven by activity in the deepwater sector. During the 2013-2017 forecast period, deep and ultradeepwater well intervention demand is expected to rise by a compound annual growth rate (CAGR) of 8% and 18%, respectively.
Infield Systems believes that the significant rise in the number of deepwater well installations will help boost the share of global intervention demand taken by deepwater activities to 29% during the 2013–2017 period, a rise of 8% above the 21% share estimated in 2008-2012.
Infield Systems expects deepwater well intervention demand to stem primarily from activities in the African, Latin American, and North American markets. In combination, these three regions are anticipated to account for more than 91% of total global deepwater intervention demand throughout the forecast period.
including Brazil, Angola, and the USA, are expected to account for the majority of demand. These three countries are at the very center of the deeper waters and should continue to provide significant long-term intervention opportunities.
With a 31% share of demand, the majority of future deepwater well intervention demand is set to come from the Brazilian market. Much of this activity is being driven by Petrobras fields located in the country’s pre-salt basins.
Demand from the US GOM is expected to account for the second largest proportion of deepwater intervention opportunities, at 23%. The key difference between the two areas is that there is already an established base of deepwater intervention vessels working in the US GM.
Well Ops Q4000 vessel has worked exclusively in the region since it was delivered in 2002, and its success has led Well Ops to order a sister vessel the Q5000. The Q5000 will enter service in 2015 alongside the Q4000 and the newly acquired Helix 534, a former drillship unit that has been converted into a well intervention vessel in order to serve the growing demand in the region.
With a 20% share of demand through the forecast period, the third largest market for future deepwater intervention activities is Angola. Total, the largest subsea well operator in the country recently contracted the Skandi Aker to perform intervention activities in the country on an initial two-year contract, which began in early 2013.
As the number of subsea wells continues to increase, with more and more coming on-stream across the globe, deepwater intervention demand is expected to continue its recent growth trend. This expected growth could offer an increasing number of opportunities for specialized well intervention vessels to enter the market, especially as rig day rates continue to climb towards US$600,000/d for an ultra-deepwater unit. OE Review
Since joining Infield Systems in 2011, James Hearn has primarily been responsible for the development of the company’s offshore drilling rig database. Most recently James has worked on a variety of research and bespoke client projects, and recently authored the updated version of the company’s Well Intervention Global Perspective Report.
Subscribe
