The exclusive ultra-deep water club

A highly exclusive club of major oil companies has gained an edge in exploiting potentially vast oil and gas resources in so-called ultra-deep waters.
The entry fee to this club is years of expensive effort to obtain the needed technology and operating experience. British Petroleum Co. plc (BP), Exxon and Shell have turned the deeper regions of the Gulf of Mexico into an incubus for technical innovation that should have world-wide application, just as Petrobras pioneered oil extraction in ever-deeper waters off Brazil.
What links the four isn't merely the ability to drill in waters deeper than 4,500 feet: They have also developed the equipment and management skills to allow them to operate commercially in such conditions.
Armed with that expertise, they are now staking out commanding positions in the most promising offshore basins. The border between deep water -- within range of more or less conventional production techniques -- and ultra-deep water, where conventional technology is insufficient, is currently pegged at just under 5,000 feet.
The definition of "ultra-deep" is a function of changing technology, management skills, capacity to handle ever-heavier structures such as risers that are miles long, and development of alloys and fibres that can withstand extreme temperatures and water pressure.
Also, subsea completions and maintenance get trickier the deeper one goes.

While Shell and BP have grabbed much of the limelight for their exploits in the Gulf of Mexico, Exxon has arguably taken the lead at a global level in the push into ultra-deep waters by accumulating interests in 300 deep-water blocks, focusing on the West Africa plays of the Niger Delta and Congo basins, as well as the Gulf of Mexico.
But BP and Shell are also in both areas and are pushing out the envelope of technological development: BP with the Gulf of Mexico Walker Ridge project in 9,700 feet of water and Shell with its tricky Mensa gas scheme, which has the current record for the deepest output in the Gulf of Mexico.
Brought on stream in July 1997, Mensa is in 5,300 feet of water and involved several advances in subsea production systems.
Besides Angola's rich Block 33, Exxon has interests in Congo's 2 ultra-deep blocks, Mer Tres Profonde Sud and Mer Tres Profonde Nord.
The company's next showcase is the Hoover/Diana development in the Gulf of Mexico, where it plans the deepest drilling yet from a platform tethered to the seabed, producing 100,000 bpd of oil and 325 mm cfpd of gas from the main Hoover field in 4,800 feet of water and a unique tie-in of satellite Diana.
Beyond Petrobras' base off Brazil -- where it holds the record for the deepest production well at 5,410 feet in the Marlim fields -- the state-controlled company has only got its toes wet as a partner in the Gulf of Mexico and West Africa.
Beyond the Gulf of Mexico, the Congo Basin off Angola and the Congo Republic (Brazzaville) offers the next opportunity for a second tier of firms to catch up with the leaders.
Amoco Corp., Conoco Inc., Chevron Corp., Elf Aquitaine, ENI and Statoil are all at various stages of initiation into the ultra-deep game, lured in part by large discoveries in only slightly less deep waters.
Amoco and Conoco have each ordered new drillships for delivery in the next 2 years that can go as deep as 10,000 feet for use in the Gulf of Mexico. And Elf concedes that gaining ultra-deep capability is essential to its global ambitions and to cementing its lead role off West Africa.
The French firm's Girassol field, in 4,430 feet of water in Angola's Block 17, is almost -- but not quite -- in the ultra-deep league.
The stakes are high. Conservative estimates put some 5 bn-6 bn barrel of recoverable reserves in Angolan ultra-deep waters beyond finds such as Girassol.