Day 2 at OTC was all around the world

The Offshore Technology Conference’s international character came into focus Tuesday as Petrobras predicted big growth from reservoirs in Brazil, China outlined its long-term plans for harnessing shale gas and France’s Total touted the success of a massive 49-well project off Angola.

But domestic matters weren’t forgotten either, and a former U.S. drilling regulator voiced worry that environmentalists’ legal fights against offshore energy development could threaten activity in the Gulf of Mexico and mid-Atlantic.

Brazil’s Petrobras is collecting 310,000 barrels of oil each day from challenging pre-salt reservoirs — tougher to analyze with seismic surveys because they lie beneath layers of salt that partly obscure any hydrocarbons lurking below.

Carlos Tadeu da Costa Fraga, executive manager for Petrobras’ pre-salt exploration and production, said the company has used horizontal drilling and other techniques to predict success more reliably and increase productivity.
Now, Petrobras expects to grow pre-salt production to more than 1 million barrels per day in four years and more than 2 million barrels per day by 2020.

Still other challenges confronted Total at the French company’s Pazflor oil development 90 miles off the coast of Angola. Perhaps the biggest obstacle was figuring out how to separate gases and liquids on the ocean floor from wells spanning several subsea reservoirs.

The resulting $9 billion project involves 49 horizontal wells and has the capacity to produce 220,000 barrels of oil per day, said Louis Bon, Total’s vice president of exploration and production operations, during an OTC luncheon presentation.

Extensive reservoir studies helped Total determine the best way to drill the wells at the site, with partners including Norway’s Statoil and Britain’s BP.

“It is one of the biggest and most sophisticated deep-water projects today,” Bon said. “We have proven some new technologies to be available to the industry.”

China faces a host of environmental and geological obstacles as it seeks to extract oil and gas from tight shale rock formations to meet the country’s surging energy demand.

The country has the resources, said Yan Cunzhang, executive vice president of the China National Petroleum Corp. But the shale reserves are deeper, smaller and in tighter formations than those that have been developed in the United States.

The intense water demands of hydraulic fracturing techniques used to unlock the oil and gas also could be an obstacle in arid China.

“There is good potential in unconventional reserves, but it is in the early stage of commercialization,” Cunzhang said.
In discussions about the United States, regulatory concerns took center stage as Randall Luthi, the head of the National Ocean Industries Association, described looming new mandates and the prospects of congressional action on oil issues.
Luthi predicted that emboldened environmentalists will use legal tactics long employed in the Arctic to slow oil development in the Gulf of Mexico and along the mid-Atlantic.

A major new battle line could develop around seismic studies meant to help pinpoint oil and gas reservoirs deep below the sea floor. The Interior Department’s Bureau of Ocean Energy Management is readying a final environmental study of a potential geophysical research program from Delaware to Florida.

Conservationists opposed to the seismic studies and environmentalists who oppose offshore drilling are laying the groundwork for legal challenges of the government’s environmental study and any final decision to authorize the geophysical research.

Because seismic surveying by geophysical contractors is one of the first steps in a long path to offshore drilling, and oil and gas companies use the research to discern where they may want to explore, offshore drilling foes are focused on slowing that work, Luthi said.

Chip Gill, president of the International Association of Geophysical Contractors, said the push against seismic research is part of a “clear strategy” to halt offshore development in the region.

“If you can stop seismic surveys, you can stop everything that follows,” Gill said on the sidelines of Luthi’s OTC presentation on offshore regulation.

Conservationists say the air guns used in seismic research produce pulses of sound that are loud enough not only to penetrate through the ocean and under the seafloor but also to damage marine life, including endangered North Atlantic right whales and loggerhead sea turtles.

The environmental group Oceana issued a report last month concluding that nearly 140,000 whales and dolphins could be injured if the ocean energy bureau allows seismic research along the Atlantic Coast.

Jeannie Kever, Zain Shauk and Harry R. Weber contributed to this report.