MMS Report On Gulf Of Mexico Long-Term Production Devastating Contrast To Jack 2 Euphoria

[hatrack]

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Mad Dog was shutdown as of April 1, 2007, for reasons still under investigation. Mad Dog and Atlantis (capacity: 200 thousand b/d) lie close to each other in the Green Canyon area of the Mississippi fan fold belt (graphic left) beneath the salt canopy. It appears possible that Atlantis may experience reduced oil flows, but no one will know until the project, which has been delayed twice, comes on-stream in late 2007. On the other hand, Holstein, which is adjacent to both Mad Dog and Atlantis in the Green Canyon, has lived up to expectations (110 thousand b/d). Uncertainty rules the day.

The Thunder Horse project (Mississippi Canyon, 250 thousand b/d) has been delayed until the end of 2008. BP's massive semi-submersible production platform was left listing in the Gulf waters after the 2005 hurricanes. Cracked manifolds created more woes, as BP attempts to produce commercial oil (Chicago Tribune) using the world's deepest subsea collection of "pumps, wellheads, piping and gathering centers."

Thunder Horse's oil reservoir is nearly 5 miles below the water's surface. At that depth, oil will gush from the drill pipes at a temperature of 275 degrees Fahrenheit, under a metal-crunching 17,400 pounds per square inch of pressure. Those conditions can stress even the mixture of high-strength steel and alloy that make up the half-inch welds on the manifolds and pipes of the Thunder Horse oil fields... While the manifolds sat idle for a year after the platform tilted, the crushing pressure at the bottom of the sea forced hydrogen atoms into the mix of steel and high-strength alloy that made up the welds. The hydrogen caused the metal to become brittle, and when water was forced through the piping during the restart testing, the welds failed.

As BP diagnosed the problem, they notified Shell, who was also planning to "submerge manifolds at depths," of the possible problems. Although Thunder Horse is a technological marvel, there are consequences when you are doing things for the first time. In every large field examined here, there are significant concerns affecting the MMS's Committed Scenario.

What of the MMS's Full Potential Scenario? This risky projection is based on operator discoveries and undiscovered resources (graphic top, left). The Committed Scenario already includes projects in various Lower Tertiary plays, including Cascade and Chinook at Walker Ridge, and Great White, Silvertip and Tobago in Alaminos Canyon. Presumably, undeveloped discoveries in the same areas — e.g. Jack, St. Malo and Das Bump at Walker Ridge — make up the bulk of the higher production levels in the Full Potential Scenario, which reaches 2 million b/d in 2011 and declines thereafter when undiscovered resources are excluded. The MMS makes a number of unwarranted assumptions — e.g. "Projects with discovered resource volumes over 200 MMBOE are assumed to reach peak production in their second year, sustain that peak rate for a total of 4 years, then decline exponentially at 12 percent from that time forward" — in light of the fact that fields like Mad Dog have underperformed and there is no production history for Lower Tertiary fields to draw upon.

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http://www.energybulletin.net/31378.html

[hunter]

1. "... their forecast for natural gas production in the Gulf is much worse ..."

:scared: