The crews of British North Sea oil rigs have grown accustomed to being battered by fierce winds and towering waves. But over the past 18 months, the whole North Sea oil industry has had to come to terms with a rough patch of its own.
The oil price, refusing to break out of the $40-50 bracket, is putting intense downward pressure on a region that was already one of the most expensive in the world for exploration and production. From April to September 2015, petroleum revenue taxes collected by the UK Government stood at -£242 million – the first time in the history of North Sea oil that tax receipts had fallen into deficit.
This has left explorers in the region facing some tough questions: maintain or lower production; stay or go? Some, such as Total, have reduced their exposure to the region. In April, the French major sold the St Fergus gas terminal and pipelines to US private-equity firm North Sea Midstream Partners for £585 million, though it continues to keep a significant presence in the region. In October, independent explorer EnQuest upped its production after getting the first oil from the Alma/Galia field, though this will be accompanied by heavy cost-cutting as it looks to slash capital expenditure by $600 million, or 45% on an annualised basis.
They aren’t the only ones looking to save, with ConocoPhillips and Shell making redundancies at the start of 2015. According to Oil & Gas UK, a trade organisation of the offshore industry, 5,500 British oil jobs have been lost in the industry since the end of 2014, and most believe that this is just the beginning.
Though BP has done some cutting, getting rid of 200 jobs and an additional 100 contractor positions on its North Sea assets, it has probably been the most vocal in its commitment to the region in terms of finding new reserves and maximising the potential of existing assets. In August, the company confirmed that it is expected to spend $1 billion on extending the life of the Eastern Trough Area Project in the central North Sea by 15 years, pushing its useful life out to 2030.
The company’s (recently retired) North Sea head Trevor Garlick told industry website Energy Voice at the time, "The solution to the North Sea is to keep investing. If we stop investing we’re finished. It’s really hard to find big new statement discoveries. It’s daft to not look hard, at least, at making the most of what you have."
Quad 204
Although it was approved in a very different oil-price environment back in 2011, the Quad 204 (also known as Q204) project is very much in the same spirit.
Located 175 miles west of the Shetland Islands, the Schiehallion FPSO facility has been in operation since 1998 and has produced 300 million barrels of oil from the Schiehallion and Loyal fields. Sitting in 400m of water, the FPSO was engineered with a design life of 20 years, in which time the prospects of the fields it serves have improved considerably.
The oil reservoir sits 2,000m down and covers an area of approximately 75 square miles. It was initially believed to hold around 500 million barrels of oil, but the success of new appraisal wells (pushing the total number of wells drilled at the site to 52) has sent the recoverable estimate shooting up to one billion barrels.
Given this lucky break, it’s little surprise that in July 2011 BP announced it was to expand the life of the Schiehallion and Loyal fields through an extremely ambitious £3-billion renewal process. Under the surface, the company and its partners have been constructing 25 new production trees, each weighing in at 34t. The five subsea drill centres – West, Central, North, Loyal and North West – are all being fitted with new manifolds, flowline termination assemblies and umbilical termination assemblies. New flowlines and umbilicals will connect the drill centres to the central drill unit, from which the oil and gas will be sent up to the FPSO through a new riser system.
Quad 204 is equally ambitious above the surface. In order to process all this increased output, a new FPSO is being built. Known as Glen Lyon, it will be able to hold 900,000 barrels of oil and compress 220 million cubic feet of gas a day. The vessel is on the verge of completion at the Hyundai Heavy Industries shipyard in South Korea and will soon embark on sea trials in South Korea in order to test its systems in open water. It will then make the 90-day trip to Europe, where it will spend a few weeks in Norway undergoing deepwater testing before going into operation in early 2016.
"Offshore west of Shetland, great progress is being made," a spokesperson from BP tells Gas Technology Review. "The previous FPSO that served the fields – the Schiehallion vessel – was removed in 2014 and since then all of the new flowlines, moorings and risers have been installed awaiting arrival of Glen Lyon. A number of existing wells have been worked over to make them ready for start-up, and drilling is almost complete on the first two of 14 new wells that the newbuild drill rig the Deepsea Aberdeen is drilling. It has been a particularly busy season offshore in 2015, with up to nine vessels operating in the field."
Rise above
Of the seabed infrastructure, the only things that have not been replaced are the gas and water systems, the original production manifolds and the christmas trees (along with their subsea control modules).
The riser system is innovative in a number of ways. Glen Lyon will be attached to the subsea system with 21 flexible risers, six of which are new and 15 of which are replacements. Each will be 850m in length and will be tethered to an anchor that is suction-piled to the seabed for the sake of stability. Along the length of the risers are periodically placed buoyancy modules that give them large, loose ‘S’ shapes, enabling the required flexibility in a place where waves often reach 30m in height. Combined with the turret on the bow of the FPSO, which is designed to naturally rotate towards the waves, the ‘S’ shaped risers allow the FPSO to move 18m in any direction and are strong enough to withstand a 100-year wave.
"[A highlight is] the development of the larger bend stiffeners to manage the increased vessel motion of Q204 compared with Schiehallion," BP’s spokesperson says. "[This is] partly due to Glen Lyon being a longer vessel, but also due to the greater understanding of metocean conditions that we have developed over 15 years of operating experience."
The Schiehallion FPSO employed risers with a two-part bend stiffener (designed to add stiffness to a riser or flowline), with the two parts joined together by a latching mechanism that on occasion failed. Sometimes the inner bend stiffener would slip out of the riser, and the other sheath was prone to thinning from rubbing up against a metallic element on the inner bend stiffener. Quad 204 uses a simpler design in which the two parts are anchored together without the need for a latch mechanism – the same stiffener design as is used on the Thunder Horse field in the Gulf of Mexico. Double outer sheaths have been introduced to reduce the effects of installation damage, and extra-tensile armour to limit corrosion.
Most of the important improvements, however, are not in the riser hardware itself but in the way it is monitored in order to catch faults as early as possible. A new system has been introduced that monitors the movement of vent gas within the annulus (gaps between concentric pipe cylinders) using vacuum testing (also known as pressure testing). Previous systems have been based on a flowmeter and have proved not sensitive enough for operation.
New systems have also been introduced to measure the build-up of marine life on the surface of the riser, and to control the geometry of the risers and mooring cables in real-time. The latter is known as a riser and anchor chain monitoring system (RAMS). A sonar array is fitted to the bottom of the FPSO that provides real-time measurements of cable and riser positioning and creates a body of historical data. It can then be programmed to raise an alarm if it detects a significant deviation from the norm.
"The latest issues in [riser technology] are about integrity management and monitoring, in terms of instrumentation and analytical methodologies," says BP’s spokesperson. "This is aimed at addressing conservatism and uncertainty over corrosion fatigue for flexible risers when the annulus is flooded. In an extreme environment, the degradation region is difficult to accurately model and test data can struggle to replicate the exact environment. The improvements made for Q204 risers address this."
