A little sign of life

A Couple of Deep GOM Projects Get Go-Ahead

It’s been little more than a year since the infamous Macondo oil spill in the Gulf of Mexico brought industry activity there to a screeching halt for the most part.

For the Gulf operators, it likely feels more like several years – for good reason.

The event essentially turned the world upside down for players in this offshore arena, which provides about 30 percent of the domestic crude oil supply.

While government agency personnel plodded along devising innumerable new requirements and restrictions, especially for new deepwater permits, some rigs exited the Gulf while many field personnel endured a job hiatus or were kept busy with menial tasks.

It would be unthinkable to abandon this hydrocarbon-rich area, and the good news is that progress is being made for work to resume, albeit at the proverbial snail’s pace.

Among the few permits issued since the moratorium, mainly in the shallow water, two major deepwater projects received the green light to proceed despite the dark cloud of regulatory uncertainty that continues to hover over the region.

Given the deepwater fields’ reputation for major hydrocarbon resources, these particular projects likely will make the statement that the Gulf is back in business.

Keathley Canyon

ExxonMobil received a permit to resume drilling a deepwater exploration well that had been put on hold by the moratorium.

Located 250 miles southwest of New Orleans in about 7,000 feet of water, the KC919-3 wildcat well drilled into more than 475 feet of net oil pay and minor gas in predominantly Pliocene sandstone reservoirs of high quality. The well confirmed a second oil accumulation in Keathley Canyon Block 919.

As of early June, the well had reached 16,000 feet and the plan was to continue drilling.

Additional pay intervals at Keathley Canyon were encountered in 2009 and early 2010.

“We estimate a recoverable resource of more than 700 million barrels of oil equivalent combined in our Keathley Canyon blocks,” said AAPG member Steve Greenlee, president of ExxonMobil Exploration Company.

“This is one of the largest discoveries in the Gulf of Mexico in the last decade,” he added. “More than 85 percent of the resource is oil with additional upside potential.”

Cardamom

Not far away another major project is gearing up for big things.

Shell is set to implement a multi-billion dollar investment to develop its significant Cardamom oil and gas field at Garden Banks block 427 in more than 2,720 feet of water 225 miles southwest of New Orleans. The Cardamom reservoir was discovered in 2010.

Further development drilling is on the agenda along with installation of undersea equipment.

Shell announced that the 100 percent Shell-owned project is expected to produce 50,000 boe per day at peak production and more than 140 million boe during its lifespan.

The company said its exploration plan for the field was the first to receive approval since the federal government’s moratorium for drilling was lifted.

The Cardamom discovery well was drilled from Shell’s Auger platform, and production from the field will flow through the Auger facility. Using existing infrastructure for production will diminish the offshore footprint.

The initial exploration well has been producing from Auger since December, 2010, and 2014 is the target date for first oil from the full project.

According to Shell, modifications to the Auger platform will include additional subsea receiving equipment, a new production train and weight mitigation. This is expected to significantly increase the Cardamom liquid handling, cooling and production capacities.

Cardamom presents a meaningful example of the myriad opportunities awaiting GOM explorers using the latest technology.

Shell noted the discovery was a result of advances in seismic imaging and extended reach drilling. Its potential was initially recognized in the early stage of the Auger development, but it couldn’t be fully assessed owing to a layer of salt in close proximity, which affected the quality of traditional seismic images.

Noteworthy improvements came about via seismic imaging advances.

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