Upbeat Don out of the blocks
  from: Offshore Engineer
  by: Darius Snieckus
  Thursday, October 02, 2008

Being created by yoking together one field that has lain dormant since discovery 30 years ago with part of another that ceased production in 2003, the £360 million Don Area development is expected to add over 40,000b/d of oil to UK North Sea production rates once brought onstream next year. Darius Snieckus speaks with operations services specialist Petrofac about its first greenfield operatorship in the region.

Transocean’s John Shaw semisubmersible arrived on UK continental shelf block 211 in the northern North Sea recently for a scheduled seven-well campaign on West Don and Don Southwest. The 14-month assignment marks the start of the offshore development drilling and subsea construction phase of a 54 million barrel tandem development of the two fields that Petrofac Energy Developments, in its first formal operatorship in the province, is aiming to bring onstream by mid-2009 using a two-stage floating production/ subsea development concept.

Start-up of the new Don Area development carries a wider significance on the UKCS than simply its promise of streaming over 40,000b/d into the region’s overall production flow: it is a model Third Age development that weaves together a floater-based early oil production scheme, innovative subsea technology, and ‘dynamic partnerships’ to commercialise reserves once deemed uneconomic.West Don has lain dormant since discovery in 1975; Don SW, 7km off, is a redevelopment of part of the former Don field abandoned in 2003.

Under the field development programme given the green light by the UK government in May, Don will be produced in two phases. A first phase, slated to run for around six months, will see the Northern Producer semisubmersible floating production facility (FPF) processing and exporting oil from the two fields via a single anchor loading system to offshore shuttle tankers. In phase two, wellflow will be rerouted along a newbuild export line to Lundin’s Thistle platform before entering the Brent pipeline system.

‘The original Don field produced through the 1980s and then various initiatives were put forward for it during the 1990s and early-2000s to look into how – and who – might best be able to exploit the remaining resources there, but not many conclusive actions came out of this process,’ remarks Petrofac Energy Development executive vice president Bill Dunnett, who joined the company last October from Halliburton to oversee project management of the greater Don Area.

‘And then there was West Don, which was discovered by Burmah and later appraised by Shell and BP, that in the end was left undeveloped.’

‘I think we have approached Don in a much more conservative way than a conventional E&P company would approach it,’ he continues. ‘The very close scrutiny we have been under and the challenges that were set before us in advance of our receiving sanction to develop this project have been significant, not least because Don is a test of our ability to operate in the UK North Sea as an operator [rather than service contractor]. We do operate other production fields overseas but wanted to be at the top of our game before taking this on and build on our dutyholder experience.’

Development of West Don and Don SW is a boat that has been buoyed up, like the rest of the international offshore industry, by the rising tide of oil prices. As Dunnett notes: ‘The price of crude was a big factor in terms of our confidence. Still, we had no idea how high it would go – or for how long. So the economics underpinning the project had to be very solid: and Don is very viable even at $55/bbl.’

Having revisited some of the engineering work done previously on the fields and hashed out a range of development options, Petrofac and partners Valiant, First Oil, Nippon and Stratic all shook hands on a plan for the two fields ‘within a week’ of first concept discussions. Fast work, particularly as Petrofac had only taken over operatorship of West Don and Don SW in 2006 by buying BP’s and Conoco’s shares in the two developments and the negotiating of a fixed field unitisation for the former, which straddles two blocks.

‘The key was bringing the partner groups together from the two fields,’ underscores Don Area project manager Craig Matthew. ‘This allowed us to treat it as single development opportunity rather two separate field tiebacks. This really did transform the project, bringing our destiny into our own hands. And it was helped by the fact that we had been able to identify a production rig, in a very tight market, that could be available to us in the near-term. But we still had to sort out the issue of export route and get our development plan together before we could contract the rig. Fortunately, because our partners saw the opportunity there was to be grasped here we could move ahead swiftly.’

‘We had an opportunity before us, we had alignment with our partners as well as with the [Petrofac] board,’ adds Dunnett, ‘so we said “Let’s move” and because of the amount of preparatory work done here by our project team we were able to rapidly look at options to optimise the development.’

High angle calculations

As plans stand for the new Don Area development, located 150km northeast of the Shetland Islands, three wells will be drilled on West Don – two updip high angle producers and one downdip water injector – and four on Don SW – two high angle producers and a pair of water injectors – by the John Shaw semi.Wellfluids from West Don and Don SW’s Brent sandstones will flow along individual 8in production lines to a subsea riser base before travelling up over a midwater arch to the Northern Producer FPF above for onward export, in the first instance offloaded in 500,000bbl parcels to shuttle tankers. Field life is estimated at 7-8 years.

Securing the Northern Producer for Don has been fortuitous on several levels. Not only is the FPF seen by Petrofac as a more desirable processing facility than a host platform on the grounds that it ‘reduces the amount of offshore work, saving costs and increasingly the level of safety’, but the company is also very well-acquainted with the unit, having operated it on the UK North Sea Galley field for 10 years on behalf of Texaco and, later, Talisman, until it was demobilised last year for conversion into a flotel.

With the Northern Producer, Petrofac might just have history on its side too: in 1997, Galley became the first case of a contractor being entrusted with dutyholdership of an offshore installation, with Petrofac Facilities Management taking on the overall responsibility of the management and safe running of the floater along with provision of all offshore crew, onshore support teams, and necessary subcontractors. Arguably a good omen for the company as it takes on its first greenfield operatorship on the UKCS.

Currently anchored at Aker McNulty in Tyne & Wear, the Northern Producer is part-way through a ‘general renovation’ project that encompasses two scopes of work. One, characterised by Petrofac Facilities Management vice president of operations management Steve Bullock, as ‘life extension’, aims to bring the unit up to a standard ‘as near to new as possible’ with significant maintenance work on all of the marine and topsides plant and equipment, and a fresh coat of anticorrosion paint being applied to the unit. ‘This is being locally supervised by the Petrofac core team who are living on the facility 24/7 working a two-on/two-off rota, which ensures all aspects of the work are effectively managed with the permit to work system fully operational as it would be in a live offshore environment.’

The other workscope involves ‘slight alterations’ to the FPF including reconfiguration of its riser entry points, putting in new metering, modifying its gas plant and installation of a new subsea control system. The Northern Producer will the also be outfitted with a new eight-point chain mooring spread to pre-empt any integrity issues during its life-of-field assignment on Don.

‘We’ve done a full structural survey and review of the unit with the help of Aker Solutions and the original designer, with Lloyds Register as the certifying authority,’ explains Bullock. ‘It has been a very reassuring inspection exercise, not least because there has been only minor fatigue work to be dealt with.’

‘The whole of this refurbishment project has been carried out with the 10-year window in mind,’ he adds. ‘There are many softer issues sitting behind this project too, working on safety cases with the HSE and so on, but the facility has been crewed by Petrofac since it came off Galley so we know where things stand. And after having demobbed it after Galley it is very pleasing to be remobilising it for a Petrofac field.’

In June, the Northern Producer’s owner, Sea Production, awarded Petrofac Facilities Management the dutyholder contract for the unit under a contract estimated to be worth around £15 million/yr.

Streamlined subsea architecture

Installed some 150m below the Northern Producer, Don’s subsea architecture will be arranged on a west-east axis. On West Don, a 8in water injection line and 3in gaslift line run alongside the 8in production pipeline from the field’s three wells; on Don SW, four wells are tied-back to the riser base with like-diameter production, injection and gaslift lines. Two 8in production risers, one 8in water injection risers and two 3in gaslift risers run up to the FPF. FMC is delivering the subsea trees and wellheads, Technip has been contracted to fabricate and install the in-field lines, and Wellstream is manufacturing the MCS-designed risers. Petrofac is managing the subsea work being undertaken by these companies.

Once Thistle begins receiving Don’s production for export into the Brent system, the field’s ‘highly marketable’ crude will flow along an 8in oil pipeline and 3in gas line to the platform, standing 12km away. Unusually, the SAL loading system supplied by APL for the early production phase of Don will be left in place once transport of wellfluids switches over, in line with plans to maintain ‘flexibility and a back-up export route’ should it be needed in the future.

While all hands are to the pump progressing Don at present, the future potential of block 211 is not being left to fate. Tying together West Don and Don SW is establishing the acreage as a core area for Petrofac, with four satellites on the radar in the development’s environs and a commitment pending to spud one well by the end of next year.

Though Petrofac has six dutyholder contracts covering 15 assets on the UKCS, Don remains Petrofac’s first fully-fledged operatorship off the UK, ‘a big step’, as Dunnett acknowledges, and one that carries with it great expectations of the company. ‘We have developed a niche as primarily a service company and it is not our aim to compete with the majors as an operator,’ he underscores. ‘Our goal is to augment what they do, to look at assets that are perhaps underexploited for whatever reason – age, size, maturity, technological complexity – and make more of them.’

Fast-track standalone development that Don is, the field, he agrees, should be a useful showcase of Petrofac’s breadth of skills in engineering, operations and project execution. ‘We are developing Don on a schedule that I don’t believe many other companies could take on,’ he adds, ‘because, except for the drilling, we have pulled together the engineering, facilities management and operations sides of this project in-house at a time when the market for expertise is very tight.

‘There is a strong demand for this type of development now – one that requires that an operator look at things slightly differently,’ Dunnett concludes. ‘And we are certainly seeing other opportunities in UK North Sea that would fit a model similar that which we are using on Don.’ OE

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