Creating Value from Marginal Offshore

Assets Using Buoy Technology and

Innovative Commercial Solutions

Martin Wallwork (ABTechnology), Barath Rajgopaul (ABTechnology)

& Alex West (Wood Group PSN)

� Introduction

� DEVEX 2011 Topics Addressed

� Marginal Offshore Fields

� Buoy Technology

� Oil Production Buoy

� Case Study

� Power and Control Buoy

� Summary

Content

An Introduction to ABTechnology

� ABTechnology’s (ABT) objective is to enable the development

of certain marginal offshore hydrocarbon reserves

� ABTechnology have established a Strategic Partnership with

Wood Group PSN

� ABT brings together:

– A Highly Credible Engineering and Delivery Organisation

– An Enabling Technology

– Financial & Commercial Expertise

– Risk Management Expertise

DEVEX Topics 2011 Addressed by ABT

�Small is Beautiful?

The Challenge of Small Field Developments

�Resurrection Fields

Breathing life back into Mature Fields

Managing Stranded Field Development

�Novel Technologies – Risk or Opportunity?

What We All Know…

� Large hydrocarbon discoveries are less common

� Marginal offshore fields include:

– Remote location

– Small & larger hydrocarbon accumulation

– Low productivity reservoirs

– End of life fields

– Stranded assets due to inability to access existing infrastructure

� The key is to reduce capital and operational costs

� Buoy technology enables certain marginal fields become

economic:

– Oil Production Buoy

– Power and Control Buoy

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Buoy Technology: Background

� Use of traditional buoy technology for non-conventional

applications has been established for over 30 years

� Buoys are already in place and proven for field control, additional

power, flaring & data gathering

Buoy Technology: Background

� Reduces system size & standard buoy design

� Based on remote and unattended operation

� Re-usable

� Stable platform for process equipment

� ABT & Wood Group PSN have undertaken technical review of the

production buoy concept …

…Concluding that there are no show stoppers

Oil Production Buoy: Concept Outline

Taut-moored buoy contains:

•Oil & Gas processing

•Electricity generation

•Communications

•Well control

•Access tower

Excess gas is flared, exported or re-injected

Oil stored in gravity base for export shuttle tanker

200-300,000 bbls storage

� Water depth: 80-200m+

� Production rate: 1,000 bpd - 20,000 bpd

� Recoverable reserves: 3MMbbl – 20MMbbl

� Low to Medium Gas to Oil Ratio

� Light to medium API

Oil Production Buoy: Operating Envelope

� Significantly reduces the capital cost

– Based on proven process systems applied in a new context

– Based on a standard design tailored as required

– Smaller size & low complexity systems

– Easy re-mobilisation minimises cost and risks of abandonment

� Large reduction in operating expenditure

– Remotely monitored and controlled

– Normally unattended installation

– Designed for low levels of maintenance

– Duplication of critical assets to ensure availability

Oil Production Buoy: Economics

Case Study

Generic Development

•4MMbbl recoverable reserves

•Single well development

•$90/bbl

•Pre-tax

•12% discount rate

Case Study

Development: Production Buoy

�4 yrs production

�3.2MMbbls recovered

�Lease based NPV £40m

Generic Development

•4MMbbl recoverable reserves

•Single well development

•$90/bbl

•Pre-tax

•12% discount rate

Development: Small FPSO

�1 yr production

�1.7MMbbls recovered

�Lease based NPV £1.7m

Case Study

Generic Development

•4MMbbl recoverable reserves

•Single well development

•$90/bbl

•Pre-tax

•12% discount rate

Opportunity for flexible commercial solution

�Tie buoy provision to performance of field & oil price

�Buoy led farm-in

�Combine with other marginal field development in

locality

�Sequential development of fields

Field Power and Control Buoy: Concept Outline

• Provides local power, control and chemical injection

• Provide power for subsea processing, pumping and water injection

• Reduced capital costs:

– Removing need for long umbilical installation

– Provides power or equipment space where offshore

installations are deficient

– Enables subsea system operation & remote control

• Reduced operational costs

� Reducing the Opex and Capex through enabling technology – Ocean

Resources

� Highly credible project engineering & delivery – Wood Group PSN

� The appropriate commercial solution – ABTechnology

� Each marginal field has specific technical and commercial

challenges

� ABTechnology’s brings together the above to create an economic

solution for certain marginal fields

The Key to Delivering Production from Marginal

Fields…