The Deep Star Project: An Overview Of Industry Cooperation

Abstract

ABSTRACT Texaco's vision for development of the deepwater in the Gulf of Mexico is closely tied to the concept of cooperation and evolution of a synergistic relationship with other members of the oil community. In today's competitive business environment, development of the deepwater Gulf will be difficult, if not impossible, outside a jointly funded, cooperative effort. his partnering may take many forms - it can include joint exploration programs (something already common in the Gulf) and joint research projects (JIP's), but it can also be expanded to areas in which the Industry does not now normally cooperate -joint research into regional development strategies and universal technology needs, joint development of hardware (and hardware interfaces), software, and other new/innovative tools, joint ownership of central processing facilities. Production sharing operations, and other innovative concepts. The Deep Star project is a major step in the right direction with eleven offshore producers considering a common development strategy for the deepwater of the Gulf This cooperative project also maximizes the value of the respective operator's limited resources for developing new technology which will be needed to make deepwater production commercially viable. DEEPWATER OPPORTUNITY The deepwater's of the US Gulf of Mexico represent one of the best remaining domestic opportunities accessible to the oil industry. This new frontier of the Gulf is generally believed to contain significant reserves of producible hydrocarbons. Discoveries announced in 1991 alone amounted to over 1 Billion BOE (reference Table 1). Discovery has not been the problem - the reserves are present. The problem thus far would appear to be lack of industry confidence that the discoveries are commercial (due to infrastructure and technology limits). Evolving an appropriate infrastructure, production strategy, and technology to produce deepwater reserves in a commercial manner, is the primary objective of the DeepStar project (Deepwater Staged Recovery - see Figure 1). The current business climate in the US has seen a considerable shift of emphasis in investment capital going overseas where better rates of return are anticipated. Thus, domestic production operations have been in a down-sizing mode for the last several years. Similar reductions are also being made in the service industry that supports production operations. This imposes an additional challenge on development of deepwater opportunities in that these projects cannot just be technically viable, but they must be commercially attractive on a globally competitive basis as well. Preliminary DeepStar study work has indicated that globally attractive returns can be made on investment from deepwater plays provided that the appropriate technology is available, the development concept is one that links capital expenditure with increases in production, and risks are minimized. MINIMIZING DEVELOPMENT RISK The challenges offered by the deepwater Gulf are considerable - both commercial y and technical y. One of the ways industry must adapt to deepwater is through a change in the way it does its business - working smarter, harder, leaner, and with less risk.