CHPATER 10A SHELL DEEPWATER COMPANIES SUBSEA SYSTEMS OVERVIEW

• Jurisdiction: United States

Oil and Gas Development on the Outer Continental Shelf
(Oct 1998)
CHAPTER 10A
SHELL DEEPWATER COMPANIES SUBSEA SYSTEMS OVERVIEW
Peter K. Velez
Shell Offshore Inc.
New Orleans, Louisiana

Definition of Terms

• Subsea — Located on the sea floor.

• Host Facility — A fixed or floating OCS facility that receives produced hydrocarbons from, and provides control and monitoring support to a subsea development.

• Hub — A host facility that serves as a gathering point for a number of subsea developments.

• Intervention — Using a drilling rig or specialized vessel to reenter a subsea well for maintenance or flow enhancement purposes.

• Laydown Sled — Distribution device for hydraulic or electric controls and chemical injection.

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• Subsea Manifold — A subsea device that serves as a collection and distribution point for produced hydrocarbons from subsea wells.

• Subsea Wellhead — Series of control valves on sea floor that permits access to and recovery from the well bore.

• Flowline — Piping that carries produced hydrocarbons from the well, to manifolds and from the manifold to the host facility.

• Umbilical — Electric and/or hydraulic lines from host facility for purpose of controlling subsea system components; Chemical lines for the delivery of chemical treatments to the wells and flowlines.

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Cost Overview

Estimated Costs ($ in millions)

Item	Shelf	Deep Water
Water Depth	200'	3000'
Wells (Based on Gen III Semi)
Exploratory (Per Well)	$4	$22
Development (Subsea)	$16	$65
Development (Surface)	$3	$20
Systems
TLP	N/A	$500
SPAR	N/A	$500
Subsea	$32	$250
Fixed Platform	$15	N/A
Pipeline (Nominal 12")	$10 (~12 miles)	$80 (40-60 Miles)

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Subsea — A Business Decision

• Pros:

— Lower Capital ($400MM vs $1,000MM)

— Quicker route to recovery (18 months vs 3+ years)

— No navigational or surface construction issues

— Better for lighter crude oil, and gas developments

— Permits Phased Development approach

• Cons:

— Not suitable for all reservoir types (heavier crudes)

— Needs infrastructure (host facilities, pipelines)

— Higher intervention cost

— Limited expansion / multiuse potential

— Cold flow, long offsets (hydrates & paraffin)

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Subsea Works Best when ...

• Reservoir...