1 murphy oil corporation nyse: mur deepwater drilling challenges benjamin choo gm, drilling –...

1MURPHY OIL CORPORATION www.murphyoilcorp.com NYSE: MUR

DEEPWATER DRILLING CHALLENGES

BENJAMIN CHOO

GM, DRILLING – MURPHY MALAYSIA


Introduction

► In search for oil and gas, operators have moved further offshore and into deeper waters.

► Deepwater is generally described as water depths > 1000 ft or 300 m.

► Deepwater is the ‘final frontier’ of oil and gas exploration.

► Deepwater fields have large commercial upside, hence justifying the technical and financial risks.


Offshore Sabah Water Depths

DeepwaterBlock K:1,320m

PetronasTowers: 452m

Kinabalu Field: 55m


Deepwater Drilling Challenges

► Deepwater drilling provides the greatest challenges in scope and opportunity.

► Drilling costs typically make up 50% to 60% of deepwater development costs.

► Overcoming deepwater drilling challenges is key to unlocking deepwater oil and gas fields as they represent the majority of the development risks and costs.

► Key aspects of deepwater drilling are the deepwater drilling rig, support vessels, shore base, specialized well planning, well control equipment and emergency response.


Deepwater Drilling Rig

► Deepwater drilling rigs are floating rigs.

► Semi-submersible or drill ship design.

► They are either moored or anchored at location or are dynamically positioned (DP).

► High load capacity, large storage capability and capable of handling high wellbore pressures (15,000 psi).

► High day rates (>$500k/day).


Deepwater Drilling Support Vessels

► Large support vessels for deepwater drilling rigs function as: Towing and anchor

handlers for moored rigs. Supplies fuel, tools,

material and equipment to the drill rig.

Remotely Operated Underwater Vehicle (ROV) support.


Subsea Well Control Equipment

► Deepwater drilling rigs utilize subsea blowout preventers (BOPs) located at the sea floor.

► Subsea BOPs are designed to operate in high external pressures caused by water depth and up to 15,000 psi internal pressure.

► Operated by electro-hydraulic multiplex (MUX) systems to achieve fast response.


Deepwater Well Construction

► Deepwater wells construction is unique as it is based on a subsea wellhead system.

► Deepwater wells are challenging due to the narrow window between the formation pressure and the rock strength.

► Other challenges include gas hydrates and cold seabed temperature.


Shorebase Support for Deepwater Drilling

► Good setup of a shore base helps to efficiently support deepwater drilling operations and prevent expensive shutdown of the drilling rig

► The shore base needs to have good infrastructure access, ample yard space and sufficient water depth at the quay for large deepwater drilling support vessels to berth.


Deepwater Emergency Response

► Emergency well control and blowout response plan need to be developed.

► Emergency response based on ICS structure.

► Access to subsea well containment package. Subsea capping stack. Subsea dispersant

system and dispersants. Debris removal.

► Ability to drill relief well.


Other Challenges

► Escalating costs, i.e. rigs, vessels, third party services, etc.

► Finding and retaining competent key personnel.► Increasingly stringent regulatory requirements for

deepwater drilling post Macondo.► Long lead times for tools and equipment.


Murphy’s Deepwater Operations in Malaysia ► Drilled over 120 deepwater wells in

Malaysia since 2002.► Global top quartile deepwater

drilling performance.► Held world record for deepest water

depth for mooring a semi-submersible rig for Ocean Rover in 8,430 ft (2,570m) of water depth.

► Developed and producing from Kikeh since Aug 2007 which is the first deepwater field in Malaysia.

► Production from subsea tieback of Gumusut Kakap deepwater field.

► First oil achieved from Siakap North Petai deepwater project in Feb 2014.

Ocean Rover

SKD Menang, Kikeh DTU and Kikeh FPSO


Deepwater Drilling Performance – Murphy Malaysia vs Global

1.982.13

2.70

3.84

4.204.41 4.46

4.59

5.60 5.68

6.27

6.60

7.24

7.898.02

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Murphy Malaysia v Global - Sub Sea DBML (1000ft) - 2011 to 2013

107 New Development Wells, Drilled between 2011 and 2013, using a Semi Submersible, or Drill Ship in water depths of between 503m and 1807m with 3 or 4 casing strings, using Rotary Top Drive, Mud Motor and Rotary Steerable drilling methods

Murphy


QUESTIONS?

1 murphy oil corporation nyse: mur deepwater drilling challenges benjamin choo gm, drilling –...

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