Challenges of offshore Oil

        According to the EIA, offshore oil accounted for 30% of global crude oil output in 2015.  This was its highest level since 2010, following a previous year-over-year increase in 2014.  This feat is even more impressive when you consider that onshore oil production has increased at a higher rate over the last couple of years.  Private and government-owned oil & gas companies have started the process of moving from the simpler shallow water wells to deep water investments because of advances in technology and the depletion of shallow water reserves.  These deep water endeavors have higher potentials than wells drilled in shallower waters, and they do come with higher risks.  However, no well drilled on or offshore is without its fair share of hurdles to overcome.

Shallow Water Challenges

Shallow water offshore wells are those drilled in water with depths of 1-999 feet.  As this is the cheapest form of offshore drilling, competition for leases and profitable production is fierce.   This category of wells has been explored for the longest amount of time, thereby reducing reservoir pressures and hindering recovery.  The variability of pressures can play havoc during the process of drilling as it can make consistent drilling mud circulation a concern (consequences of lost circulation include the potential for the collapse of the newly drilled well bore and / or blowouts from downhole pressures).  Due to the combination of comparatively lower payouts and higher completion costs, shallow wells have a higher potential for lower ROI’s than their deeper counterparts.  

        Shallow wells have been responsible for a majority of the 150 well control incidents that have occurred in the waters of the United States since the 1950s (Accidents).  This is most likely the result of the larger number of rigs as compared to deep and ultra-deep water drilling platforms, as many of the risks of offshore production are not specific to any range of water depths.   Production platforms “on the shelf” are the oldest of all offshore structures, meaning they also require the most amount of maintenance, and as a group, have a large number of workers attending to them at any given time.  As wellbores increase in age, they require workovers, improvements and modifications; all of which mean more welding, cutting, and heavy equipment usage on the platforms.  The increase in activity on these older platforms means an increased risk of accidents, injuries, and unfortunately, deaths.

Deep Water Challenges

Deep water drilling is a very complex process because of the many variables involved in finding and hitting the most valuable areas.  Not only are there the physical challenges, but even hitting the target formation is very difficult.  Professor Chris Rhodes compares the process to hitting a zone the size of a coin at the base of a two-story building with a strand of human hair; to make matters more complicated the building would have a first floor filled with rock, sand, and salt and the top floor would be filled with water. (Challenges)

To reach the ocean floor, which can be up to 1500 meters below the water’s surface, long riser pipes must be constructed.  In order to keep the rig, which floats on top of the water, from falling victim to the current or wind direction, positioning methods must constantly be deployed.  I have personally worked on an offshore rig that was tethered to a tug boat about 1000 feet away, and the tug was pulling against the rig at an average rate of 4 knots/hour, 24 hours a day, 7 days a week.  This kept the drilling rig centered over the BOP (blow-out preventer) and prevented the riser from experiencing high stress levels.  A submersible ROV (remotely-operated vehicle) was hired to keep watch over the BOP and riser at all times, as visual inspections were impossible at that depth.

Another challenge to deep water and ultra-deep water drilling operations is the pressure and temperature extremes that must be overcome to successfully drill and complete a well.  The pressure of seawater increases by one atmosphere (14.7 psi) for every 10 meters of depth.  This means that at 3 kilometers, the pressure exerted on the material near the ocean floor can be around 4,500 psi, or 300 times normal atmospheric pressure.  Not only is this a challenge for the rig’s assets, but it also makes pumping any fluid to the surface of the water difficult.  In addition, the changes in temperature can range from near freezing on the ocean floor to 450 degrees Fahrenheit in the producing formation, where pressures inside can reach 35,000 psi (Challenges).  

Environmental Concerns

        Bringing oil from many miles under the ocean floor to inland, coastal refineries requires extensive investments in infrastructure, maintenance, and personnel.  Because of the nature of exploration, production, and transportation, the environmental impact of offshore drilling can be devastating to marine life.  Events like the Exxon Valdez oil spill in 1989 and the Deepwater Horizon Spill of 2010 brought offshore oil & gas operations to the forefront of the global fight between big oil companies and the general public.  

        The Exxon Valdez incident occurred on March 24, 1989 when an oil tanker grounded on Bligh Reef in the Prince William Sound of Alaska, spilling almost 11 million gallons of crude oil into the biologically productive area.  It became the largest single oil spill ever in the coastal waters of the United States (Exxon).  When news of the spill was released, teams of NOAA scientists responded to the site to monitor its effect on marine and land-dwelling wildlife and it led to an eleven-year study on an oil spills impact to the environment.   The consequences of the Valdez spill were devastating and were felt for many years afterwards, but it did lead to a re-examination of the spill procedures for the United States government and their long-term implications for the environment (Response).  

        Another tragic accident with severe environmental implications was the explosion of the Deepwater Horizon rig on April 20, 2010.  11 workers on the drilling platform lost their lives and the entire structure eventually sank into the ocean.  The well was being drilled 5,000 feet below the surface of the water.  After a BOP failure from a lack of maintenance, and 87 days of releasing oil into the water, 130 million gallons of oil found their way out of the well bore and into the ecosystem of the Gulf of Mexico.   Crews worked for many months using physical barriers, dispersants, and underwater robots to combat the different levels of oil that formed following the release.  The long-term effects of this release are still being studying but BP was forced to pay 20 billion dollars to the United State Justice Department, a record settlement between the government and a private corporation.  The money was used to compensate the five states and many local governments that were affected, with the remainder allocated to fines as a result of the Clean Water and Oil Pollution Acts (Settlement).