PETROLEUM DIVISION PIPELINE SYSTEMS DIVISION OCEAN, OFFSHORE AND ARCTIC ENGINEERING DIVISION

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1 PETROLEUM DIVISION PIPELINE SYSTEMS DIVISION OCEAN, OFFSHORE AND ARCTIC ENGINEERING DIVISION A letter from the IPTI Chair Greetings to my fellow ASME members, and welcome to the first International Petroleum Technology Institute (IPTI) insert in ME magazine. We are proud to introduce you to our divisions and show you the diversity and worldwide nature of our activities. The International Petroleum Technology Institute formed in 2004 and soon encompassed three ASME divisions; the Petroleum Division (PD), the Ocean, Offshore, and Arctic Engineering Division (OOAE), and the Pipeline Systems Division (PSD). Information about each of our individual divisions can be accessed from the home page of our new IPTI website at IPTI Mission IPTI was founded to provide Mechanical Engineers and others, working in the focus areas of our divisions, the opportu- In this issue: ASME-IPTI Events, Training & Technology Report Introduction-Chairmanʼs Letter Events Schedule...52 Petroleum Division...53 FDPSO White Paper...54 ASME Fellow Award OOAE Division...62 Pipeline Systems Division Short Course Schedule...64 nity to participate in technical workshops and conferences while fostering the continued growth of engineering education and promotion of mechanical engineering as a career choice. The powerful combination of dedicated member/volunteer committees and dedicated ASME staff enables IPTI to conduct world class technical conferences and workshops and to foster continued growth of engineering education. IPTI offers technical fellowship, promotes mechanical engineering as a career choice, and provides career development activities for engineers. Conferences and Events In the following pages of this insert, you will discover the many conferences and events our three divisions undertake each year. These worldwide activities give you the chance to meet and network with your peers in the regions where new technologies are being discovered every day. The volunteers in our divisions work tirelessly to create, design and promote the finest of technical conferences, including the annual Offshore Technology Conference (OTC) in Houston, the annual Ocean, Offshore, and Arctic Engineering (OMAE) conference, and the biennial International Pipeline Conference (IPC) in Calgary. The calendar at will allow you to learn about and register for any of the events conducted by our IPTI Divisions. Continuing Education IPTI has developed a portfolio of engineering courses and workshops that are both technical and non-technical in nature. These courses are designed to serve the focus areas of our three divisions. The courses are individually designed to appeal to a diverse target audience; from engineers with one to five years of experience to more seasoned engineers who have much more technical expertise. Our courses are offered in classroom settings with live instructors and we also have some offered as webinars. We strive to meet the needs of our industries by offering class- May 2011 MECHANICAL ENGINEERING 51

2 room training in a public forum with registration open to members and non-members. We also offer customized in-company training presented exclusively to an individual company employee base. Courses/workshops have been delivered as standalone classes, as well as workshops offered as part of technical conferences. You can register for all of these informative and exciting courses on our website at Student Membership Qualified, young Student Members entering the Petroleum Industry earn high starting salaries and attractive benefit packages, while enjoying the opportunity for international travel in a dynamic industry. Employers are well aware that the discoveries made and the new technologies developed are accomplished primarily through the contributions of their employees and those contributions are richly rewarded. In the quest to conquer any new frontier, the industry faces challenges: The world s hunger for clean and renewable energy sources is ever increasing and so is the demand for engineers to help feed the need. Today s young engineer is instrumental in designing efficient, safe and environmentally responsible plans to extract oil and gas reserves buried deep in the earth, move these energy resources around the globe, and discover new and renewable sources of energy to power the world in the future. IPTI is here to provide the tools you need to meet these challenges. You could very well be part of the new generation of miracle engineers who will overcome these challenges through the development of new cutting-edge technologies to increase energy efficiency as well as to advance greater alternative and renewable energy utilization. I encourage engineering students to join IPTI and increase your value to future employers. Through scholarships, intern programs, our award winning collegiate council, continuing education and many other opportunities for networking and developing career enhancing skills, our Institute has what it takes to help put you and your career on the right track. For a complete listing of our student programs and scholarships, including applications, please visit Award Program One of the main drivers of IPTI is to support the art and IPTI Events June 19-24, 2011 September 24, 2011 February 6-10, 2012 April 28, 2012 International Conference on Sporting Clays ASME/ALRDC OTC Golf Tournament Ocean, Offshore & Arctic ASC, Houston, TX Gas Lift Workshop Wildcat Golf Course, Houston, TX Engineering (OMAE) Rotterdam, The Netherlands October 17-20, 2011 International Offshore Pipeline Houston, TX March 2012 April 29, 2012 OTC Crawfish Boil September 5-9, 2011 Forum Deepwater Developments Houston, TX China International Oil & Gas Pipeline Conference (CIPC) Langfang, China Houston, TX November 8, 2011 Awards Gala March 2012 SPDC District F North Carolina April 30, 2012 BMEA Awards Reliant Center, Houston September 20-22, 2011 Rio Pipeline Rio de Janeiro, Brazil Hilton of the Americas, Houston November 15-17, 2011 SURF Integrity Management March 2012 SPDC District E Fayetteville, AR April 30 - May 3, 2012 Offshore Technology Conference (OTC) October 1, 2011 Collegiate Council Meeting - 1 Houston, TX October 4-6, 2011 OTC Brazil Rio de Janeiro, Brazil Forum Houston, TX January 20, 2012 Fun Team Pistol Shoot Shooters Station, Conroe, TX April 2012 Collegiate Council Meeting - 2 April 2012 SPDC District D Las Vegas, NV Reliant Center, Houston June 2012 International Conference on Ocean, Offshore & Arctic Engineering (OMAE) Rio de Janeiro, Brazil 52 MECHANICAL ENGINEERING May 2011

3 science of mechanical engineering. Recognition through awards achieves this end in that it encourages innovation and greater levels of professional excellence. Additionally, awards help to further the careers of practicing engineers. Bestowing awards is one of the greatest pleasures of our organization, because it allows a unique opportunity for the industry as a whole to look inside itself and discover its own greatness. Each of our division offers awards, and a listing can be found at Thanks for taking the time to learn a little more about IPTI. All of us look forward to working with you in the future! Kenneth J. Bayne, Chair, IPTI Board Petroleum Division The Petroleum Division (PD) of ASME was founded in 1924 to serve mechanical engineers choosing a career in the oil & gas industry. As a member division of IPTI, the division puts on conferences, events and continuing education for ME s primarily working in the upstream industry. We have a number of long-standing conferences that we put on or co-sponsor each year, including the Offshore Technology Conference (OTC), and several networking/fundraising events such as our OTC Golf Tournament, the ASME/University of Houston Crawfish Boil and our Sporting Clays Tournament. We keep our members abreast of the latest developments in our industry by organizing specialty events such as this year s Subsea Integrity Management Forum and the new OTC events, the Arctic Technology Conference and OTC Brasil. In addition, our Continuing Education short courses have the industry s most experienced experts leading classes on the most cutting-edge technologies that exist. Student & Scholarship / Early Career Programs Besides educating our current members and keeping them informed of the latest developments in Oil Industry based Mechanical Engineering, the PD s programs that support ME students and Early Career engineers make us most proud, and drive our continuing efforts and growth. Our award-winning Collegiate Council program invites ME majors from around North America to two annual weekends where the group assembles to first plan and then complete a project that expands their knowledge of the oil & gas industry. Both weekends include site visits, shop tours and the second meeting provides the opportunity to present the results of their project to Industry Leaders. These experiences make this Council one of the most sought after ASME programs for students. Many of our student members have found a connection to their future employment simply by being on the Council. At the Petroleum Division, we are extremely proud of our scholarship program. This year, our scholarship and charitable giving to students and Universities will approach $200,000. If you are a high school, college, or graduate student Mechanical Engineering major in the energy sector, you can find a scholarship application on our website at The deadline for scholarships this year is June 15th and the deadline for applications to the Collegiate Council is July 15th. We look forward to receiving your application! The resurgence of our Early Career programs, designed to support the needs of our recent graduates promises to be just as successful. These include industry networking opportunities and seminars that facilitate the education and broadening of their general understanding of the industry as a whole. The Offshore Technology Conference Founded in 1969, the Offshore Technology Conference is the world s foremost event for the development of offshore resources in the fields of drilling, exploration, production, and environmental protection. OTC is held annually at Reliant Center in Houston. OTC ranks among the largest 200 trade shows held annually in the United States and is among the 10 largest meetings in terms of attendance. Attendance consistently exceeds 50,000, and more than 2,000 companies participate in the exhibition. OTC includes attendees from around the globe, with more than 110 countries represented at recent conferences. The Petroleum Division of ASME is one of the 12 industry organizations and societies who work cooperatively to develop the technical program each year. Our OTC subcommittee, cochaired by Jean-Francois Saint-Marcoux and Doreen Chin, reviews more than 1,000 abstracts and then the final papers that are chosen for presentation each year. The best paper reviewed by the Petroleum Division each year is awarded the Arthur Lubinski Best Paper Award. We are pleased to present the winning paper from OTC 2010 immediately following this letter. Don Wells, Chair, ASME Petroleum Division May 2011 MECHANICAL ENGINEERING 53

4 FDPSOs: The New Reality, and a Game-Changing Approach to Field Development and Early Production Systems David Harris, Harry Howard, Kenneth C. Hampshire, Murphy West Africa, Ltd.; Jeffrey A. Moore, Kenneth Bayne, Jean Pepin-Lehalleur, Doris, Inc Copyright 2010, Offshore Technology Conference This paper was prepared for presentation at the 2010 Offshore Technology Conference held in Houston, Texas, USA, 3 6 May This paper was selected for presentation by an OTC program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed by the Offshore Technology Conference and are subject to correction by the author(s). The material does not necessarily reflect any position of the Offshore Technology Conference, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Offshore Technology Conference is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of OTC copyright. Abstract The Azurite field development, installed in the Republic of Congo in 2009, employed the industry s first Floating, Drilling, Production, Storage and Offloading (FDPSO) vessel to develop the field. While the FDPSO concept has been a subject of interest within the industry for some time, the Azurite project team took the FDPSO from concept to reality. The concept has tremendous potential as a game changer for field developments, whether it is employed to unlock the value of marginal fields in deepwater even in a low oil price environment or as an early production system. Because the concept employs a drilling rig onboard the vessel, traditional challenges regarding deepwater drilling rig day rates and availability are eliminated. This paper summarizes development of the Azurite field as a way of providing context for evolution of the FDPSO concept. This paper also highlights other application for FDPSOs, and discusses some of the key variables that determine the suitability of the FDPSO concept for use in field developments. the FDPSO concept has been a subject of interest within the industry for some time, The Azurite team made the FDPSO concept a reality. It is a robust concept that has potential for much broader application, as the number of large discoveries in deepwater shrink and the industry seeks new ways to monetize stranded pockets of oil and gas. This paper will reflect on the project technical and economic drivers that led the Azurite project team to select the FDPSO concept. This paper will also discuss other applications for the FDPSO, and identify key variables that determine suitability of the FDPSO concept for use in field developments. Azurite: Inspiration for the Concept Discovery and Appraisal The Azurite Marine Field lies within the Mer Profonde Sud (MPS) block offshore Republic of Congo, just north across the border from Cabinda Block 14. Water depths across MPS range from meters. Azurite field was discovered in January 2005 with the Azurite Marine-1 (AZRM-1) well. The field was subsequently appraised in late 2005 and early 2006 with the drilling of AZRM-2 and AZRM-3 wells. Each of the latter two wells was sidetracked (ST). AZRM-2ST was also cored and tested. Aquifer support was found to be essentially non-existent along the producing trend, necessitating the requirement for water injection to support reservoir pressure. Introduction History was made in August 2009 when the Azurite field began producing offshore Republic of Congo [1]. Azurite employed the industry s first Floating, Drilling, Production, Storage and Offloading (FDPSO) vessel to develop the field. While Figure 1 Azurite Reservoir Faulting and Bottom Hole Locations 54 MECHANICAL ENGINEERING May 2011

5 Field Size Description with tender assist rig was ultimately rejected due to a lack of The AZRM-2 and AZRM-3 wells were ST to appraise the available tender rigs. The DTU with compact rig producing to four fault blocks of the field as shown in Figure 1. an FPSO was retained as a technically viable alternative, however it was considered cost prohibitive. Concepts Considered Faced with deepwater rig shortages and the desire to make Azurite integrated project team began the task of identifying and evaluating of field development alternatives, as well as team conceived of the FDPSO alternative. Figure 2 shows the a step-change improvement in project economics, the project leading the capital project execution planning effort. overall view of the Azurite field development. Multiple development schemes were identified and evaluated. The four main alternatives evaluated were: Overall View The FDPSO concept has FDPSO Feasibility Figure 2 Azurite Field Development Subsea tiebacks to third party tremendous potential as a game facilities changer for the oil and gas industry Subsea tieback to infield FPSO for deepwater field developments, Dry Tree Unit (DTU) whether it is employed to unlock the producing to FPSO value of marginal fields in deepwater Infield FDPSO even in a low oil price environment A subsea tieback to third party or as an early production system. facilities in Congo or Angola was Because the concept employs a compact drilling rig onboard the vessel, considered and deemed technically feasible, with the aid of subsea boosting. However, tiebacks to traditional challenges regarding deepwater drilling rig availability and expensive day rates are eliminated. third party facilities in Congo or tiebacks to third party facilities in Angola, with the associated cross-border issues, would have Field development economics heavily favor an FPDSO introduced too much schedule and political risk. Furthermore, concept when reserves can be produced from a single location. subsea tiebacks to third party facilities did not fully support the However the concept still has application for fields with multiple drill centers. The FDPSO can be located over the drill cen- Azurite team s objective of establishing production operations in Congo. Hence tieback schemes involving third party facilities ter containing the majority of a field s reserves, and other drill were not selected. centers can be tied back to the FDPSO. A subsea tieback to an infield FPSO was considered. This FDPSOs have been discussed and the concept developed in alternative represents the classic solution for deepwater field the marketplace since the 1990s but, until Azurite, never became a reality. While it sounds relatively novel, the technology developments offshore West Africa. However strong market demand for deepwater floaters exposed the project to significant involved is not new. Combined drilling and production platforms are commonplace, as are deepwater drill ships. Thus ex- schedule delays. Likewise their associated day rates adversely impacted project economics. tending these time-tested concepts to drilling from an FPSO DTU options were considered as a way to overcome the did not represent a quantum leap. roadblock posed by the tight market for deepwater rigs. A DTU Both wet and dry tree FDPSO solutions have been studied option was a possibility because the Azurite reservoir depth and in industry, however the Azurite team opted to focus its efforts areal extent permitted directional drilling from a single surface on a wet tree solution because it represented less of a technological step-out. With the wet tree FDPSO, the moon pool is lo- location. One alternative considered was a minimal wellhead facility with a tender assist drilling rig. This concept was successfully employed to develop the Kikeh field in Malaysia. Another motions. A base suitable for mounting a modular drilling rig is cated in the center of the vessel in order to minimize rig alternative considered was a DTU with a self contained compact drilling rig. In both DTU cases, processing would occur on sea. installed. Wells are drilled from the vessel and completed sub- an FPSO in the field. The option of a minimal wellhead facility Drilling from an FDPSO requires either a spread-moored May 2011 MECHANICAL ENGINEERING 55

6 solution or drilling in a continuous dynamic positioning mode. Benign environments and uni-directional seas permitted the use of a spread-moored FDPSO. Motions studies for Azurite confirmed that the relatively benign West Africa seastates, dominated by a long-period swell from the southwest, permitted drilling operations to continue even during a 10-year event. A FDPSO Concept Hazard Identification (HAZID) review was held prior to final consideration of the FDPSO as an acceptable option. The HAZID team included facilities engineers from the Azurite team, drilling engineering and field supervisor representatives from Kikeh Team, and drilling contractor HSE and engineering representatives. No high risks were identified that could not be mitigated through layout restrictions or the implementation of specific operating procedures. Other Applications for the FDPSO As the previous discussion suggests, market supply and demand forces and the operator s own strategic aims in Congo led the team down a path to the logical conclusion of employing an FDPSO. However the concept is certainly not limited to Azurite. The concept can easily be extrapolated to other uses: in fields with marginal reserves, as an early production system, as part of a phased development, and in fields where other storage and offloading infrastructure are already present. Marginal Field Development As a 2002 study by Matthew Simmons [2] noted, 116 of the world s largest oil fields produce 47% of the world s crude oil supply. In contrast, over 4,000 fields produce the remaining 53% (ref. Figure 3). While the report is somewhat dated and does not reflect recent discoveries in the Gulf of Mexico and Brazil, Simmons work points to the reality that the vast majority of new discoveries produce less than 100,000 barrels per day. We do not suggest that a 100,000 barrel per day field defines a marginal field, as many other factors play into the equation, some of which are technical and some non-technical. As NPV tornado diagrams[3], shown in Figure 4, normally indicate, non-technical factors such as oil price and fiscal terms oftentimes have the greatest effect on field development economics. NVP (Millions) $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 Reserves Oil/Gas Price Schedule Facilities Cost Well Count Drilling Cost Base Case = $1,350 Million Figure 4 - Typical Tornado Diagram [3] As far as technical factors go, subsurface factors such as recoverable reserves, well productivity, and well count also drive economics. As well counts increase, so do drilling costs as a percentage of the overall field development capital cost. Likewise, intervention costs and operating expenses increase. Setting aside then the ability to re-negotiate fiscal terms as well as technical and non-technical factors beyond our control, the key to making marginal fields economical lies in our ability to find a step-change improvement in capital cost and operating expense. In the case of the FDPSO concept, operators can move away from the cost-prohibitive deepwater semisubmersible drilling rig rates and towards day rates approaching that for a conventional land based drilling rig. Figure 3 Oil Field Size Distribution [2] 56 MECHANICAL ENGINEERING May 2011 Early Production System The cost of today s conventional offshore field development is staggering, with capital costs alone routinely exceeding $1 billion, even for fields in relatively shallow water producing less than 100,000 barrels of oil per day. As noted previously, reserve size, well productivity, and well count have a significant influence on project economics and therefore are often at or near the top of most NPV tornado diagrams. Consequently, reducing subsurface risk in offshore field developments is of paramount importance. For operators with portfolios that are robust enough to

7 support the associated capital cost, operating expense, and continued utilization, the employment of an FDPSO is an attractive solution: Early revenue generation from EPS or extended well tests Less expensive exploration and appraisal campaigns (day rate of the FDPSO versus the day rate of a deepwater semi-submersible drilling rig) Gain information on subsurface performance in order to optimize future full-field development drill rig, is a good fit to exploit the resources of blocks containing numerous marginal prospects and/or discoveries. As Figures 5 through 7 indicate, following initial discovery and appraisal of Field #1 by the semi, field production can then commence via the FDPSO. As the semi-sub drills exploration and appraisal wells at Field #2, and as subsea hardware is ordered for the new field, plans can commence to relocate the FDPSO to Field #2 for development well drilling. If reserves remain at Field #1 that can still be economically produced, Field #1 can be tied back to Field #2. In a similar manner, as the Re-locatable aspect of the semi-sub drills exploration and appraisal Figure 5 Production from Field #1 FDPSO acts as an effective wells at Field #3, and as subsea hardware hedge against the downside outcome. Rather than pre-investing in a full field development solution and finding that results do not match predictions, the FDPSO can be redeployed elsewhere. is ordered for the new field, plans can commence to relocate the FDPSO to Field #3 for development well drilling. If reserves remain at Field #1 that can still be economically produced, Field #2 can be tied back to Field #3. Depending on the distance between the fields subsea boosting may Phased Development Operators of blocks that contain multiple prospects or discoveries, many of which might be considered sub-economic on a stand-alone basis, will also find that the FDPSO with subsea trees offers tremendous advantages over conventional development schemes. If you have a portfolio of prospects with sufficient chance of geologic success (e.g., operating in a known geologic basin), then a more bullish approach may be warranted. Operators that discover a marginal Figure 6 Commence Production at Field #2 and Tie Back Field #1 Figure 7 Commence Production at Field #3 and Tie Back Fields #1 and #2 be required to produce the incremental reserves. This possibility must be taken into account, and sufficient pre-investment made in each field to permit such future modifications. Subsea tiebacks can be achieved via spare hub(s) on the production manifold. If a looped system is desired to enable dead oil circulation and round-trip pigging, the tieback can be via dedicated flexible risers to the FDPSO host. The impact of multiple tiebacks and differing fluid characteristics will field in an area with multiple prospects will normally require multiple prospects be drilled and appraised before an investment decision can be made. Thus cycle time, from initial discovery to first oil, is significantly impacted as each field is studied, reservoir models are built and analyzed, and multiple discovery and appraisal wells are drilled. A FDPSO, employed in tandem with a semi-submersible have an impact on the existing FDPSO topsides and must not be overlooked or excluded from evaluation of field development economics. However, such a technical and commercial evaluation is beyond the high-level scope of this paper. In the context of this discussion on phased developments, it is also worth noting that a FDPSO with subsea trees will have a distinct advantage over a FDPSO with surface trees. Once the May 2011 MECHANICAL ENGINEERING 57

8 wells are drilled, the FDPSO can easily be relocated, whereas an Some of the other key variables or uncertainties are described further below. FDPSO with surface trees must remain on station until the end of the field s economic life. Water Depth FDPU The FDPSO concept is robust over a range of water Operators in mature, established producing regions with depths. We believe that a natural lower bound water depth for existing infrastructure will find that the basic FDPSO concept the FDPSO is in the range of 300 ft, corresponding to the is adaptable. Total s Moho-Bilondo deepwater field offshore depth at which jackup drilling rigs are numerous and therefore Congo, shown in Figure 8, utilized a become an attractive alternative. In Floating Production Unit (FPU), as these water depths, either subsea wells existing storage and offloading infrastructure was already available. jackets, in conjunction with an in- or dry tree solutions employing fixed In a similar fashion, the field FPSO, will compete with the FDPSO concept can be adapted; FDPSO concept. The number of hence the name Floating, Drilling wells to be drilled, and the need to and Production Unit FDPU. A conduct routine intervention, will influence this decision. Figure 8 suitable hull form serves as the platform for drilling and production op- In water depths greater than 400 Totalʼs MoHo-Bilondo Field Development erations. Crude oil and associated gas can be exported via ft (effectively outside the range of jackup drilling rigs) but less pipeline for storage and offloading via existing infrastructure. than 1,000 ft, fixed jackets or compliant towers outfitted with a The primary advantage of an FDPU over a more conventional drill rig again in conjunction with an in-field FPSO will dry tree development lies in the inherent buoyancy offered by the hull. Other concepts like TLPs are extremely weight-sensitive and so the ability to execute future topsides expansions is limited. Key Variables that Determine FDPSO Suitability In the context of field development, prudent practice demands identification and evaluation of multiple field development alternatives. The list of alternatives need not be exhaustive and can be narrowed based on experience and suitable analogues. To determine whether an FDPSO is suitable as the cornerstone for a field development, its technical and commercial viability must first be established. A number of variables or uncertainties, with their corresponding interdependencies, factor into the determination of FDPSO suitability. For simplicity, we have identified key variables that determine suitability of the FDPSO concept for use in field developments. Many of these variables, along with their interdependencies, are represented in the strawman influence diagram shown in Figure 9. We note that the need for storage and offloading remains a key variable in the selection of a FDPSO over other alternatives. Figure 9 FDPSO Suitability ʻStrawmanʼ Influence Diagram also compete with the FDPSO concept. As with the lower bound water depth cases, the number of wells to be drilled and the need to conduct routine intervention will influence this decision. With respect to a maximum water depth, we note that 7000 ft roughly corresponds to the maximum water depths for 58 MECHANICAL ENGINEERING May 2011

9 which flexible production risers have been qualified. For the Drilling Operation Limitations FDPSO to move over each well for direct vertical access, and to Acceptance criteria are based on drilling operation limitations. Vessel offset due to sea conditions is generally not a con- accommodate additional displacements due to seastates, flexible production risers are taken as a requirement for this discussion. cern, because the FDPSO s mooring system actively adjusts to Beyond 7000 ft, however, the FDPSO concept still has application. Flexibles would need to be qualified on a case by case heave and pitch/roll. Heave is limited operationally to the correct for offset. Therefore the remaining criteria to satisfy are basis. An alternative approach that permits employing the stroke capacity of the drilling riser tensioners. We therefore assume that a 25 ft maximum heave response provides a reason- FDPSO concept in deeper water is to utilize a riser tower, with flexible jumpers in the shallow part of the water column that accommodate movement of the vessel. Recommended Practice 16Q to a resultant 2.0 o angle in order able upper bound. Pitch and roll are effectively limited by API to permit continuous drilling Table 1 Key Worldwide Metocean Parameters during a one-year seastate. FDPSO Response During Drilling Condition Global performance of an FDPSO with a conventional VLCC hull shown in Figure 10 Geographical Region & Seastates was assessed in frequency domain. Wave A principal enabler for the FDPSO frequency linear analysis was performed to concept in West Africa is the relatively benign environment and directionality of (RAOs) of motions for each wave period obtain response amplitude operators seastates. Persistent swells emanate from the and wave heading. The FDPSO response to southwest, and this condition effectively an irregular wave was obtained on the basis serves to fix the FDPSO bow heading in of RAOs using a JONSWAP spectrum. Results of this analysis are summarized in the order to minimize roll during drilling and production operations. following Tables 2 and 3. Figure 10 FDPSO To confirm viability of the FDPSO Taking into account drilling and operational considerations, the results summa- Hull Model for Global Analysis concept across other geographic regions, we evaluated the response of a taut-moored very large crude carrier rized in Tables 2 and 3 above indicate that the FDPSO concept (VLCC) hull FDPSO in 7000 ft water depth for a variety of remains viable for West Africa. Beyond West Africa, the concept seastates, as described in Table 1. also has application in some areas of the South China Sea that Suitability of the FDPSO concept for drilling purposes was are not subject to typhoons, such as deepwater Sabah, Malaysia. based on vessel response to 1 year sea states. Vessel response was The FDPSO concept struggles in other geographic regions then compared to mobile offshore drilling unit (MODU) considered, however this result is in part due to the use of a drilling operation limitations for the 1 year condition (refer to conventional VLCC hull for the analysis. The FDPSO concept criteria outlined further below). Suitability of the concept for may still have application elsewhere, however a hull that is purpose-built for the environment will be required. Such an analy- continuous production operations was also considered, taking into account 10 and 100 year seastates. sis is beyond the scope of this paper. We note that directionality of seastates was not taken into account in this preliminary analysis. Conservatively, we assumed Reservoir Characteristics and Directinal Drilling Capability that seastates can emanate from any direction. For simplicity, Subsurface characteristics are key variables that collectively wind and current were also not included as part of this analysis. help determine the feasibility of the FDPSO concept for a particular field: May 2011 MECHANICAL ENGINEERING 59

10 reservoir depth areal extent degree of compartmentalization reservoir permeability directional drilling Reservoir depth and areal extent, as well as operator directional drilling capabilities, will impact the well count and tree locations at the mudline. Likewise the degree of compartmentalization and reservoir permeability order. However, if a critical mass of reserves can be produced from a single drill center, then the FDPSO concept still has merit, and the remaining reserves can be viewed on an incremental economic basis as subsea tiebacks to the FDPSO (ref. Figure 11). The overall split in well count between those that can be drilled by the FDPSO, and those that must be drilled by the semi-sub, as well as the differential between semi-submersible rig rates and FDPSO rig rates, will drive this decision. will impact well count. Shallow and/or areally large structures are difficult to drain from a single drill center. Hence in some cases a more conventional FPSO development employing subsea trees is in Figure 11 FDPSO with Remote Subsea Trees Tied Back in Daisy Chain Arrangement Production Rates Desired oil and gas production rates will have some influence as well on whether the FDPSO concept is suitable for use, as higher field produc- Table 2 FDPSO Response for Head Seas ±25o Values around Mean Offset Table 3 FDPSO Response for Beam Seas Values around Mean Offset 60 MECHANICAL ENGINEERING May 2011

11 tion rates generally imply higher well count. The influence of well count on FDPSO suitability is discussed further in the following section. Well Count and Subsea Tree Spacing Refer to Figures 12 and 13. Using Azurite as a suitable analogue, a radial array resulted in an efficient layout and ensured direct vertical access to each tree at the mudline. For purposes of this paper, a radial array will also be assumed as the optimal subsea arrangement. Well count and subsea tree spacing are driven by reservoir areal extent and depth, as well as limitations on directional drilling. In our experience each operator has a different comfort level with respect to drilling of deviated wells; and in fact each individual within a particular operator organization will have a different comfort level. In order to avoid this subjective discussion, this paper focuses on the number of trees that can be reasonably arranged in a radial array drill center. We begin with the simplifying assumption that an FDPSO will be allowed to displace horizontally by a maximum of 5% of water depth, in order to achieve direct vertical access over each tree at the mudline. This figure is subjective but considered to be reasonable based on flexible production riser limitations. For the 7000 ft water depth case mentioned previously, this translates to a drill center with diameter of 350 ft (107 m), Assuming a minimum of 15m spacing between trees in the radial array and making allowances for export flowlines and umbilicals, a maximum of 18 trees can be supported by the FDPSO. We note that the 18 well-count is a technical result of the subsea layout. As a practical matter, if the field development required up to 18 trees, the field development economics might dictate another solution, e.g. a tension leg wellhead platform producing to an FPSO. However, it should be noted that in the Figure 12 Azurite Drill Center Layout (1400m Water Depth) Figure 13 FDPSO Drill Center Layout for 7000 ft Water Depth Relative to Azurite Layout case of Azurite (with 6 producers + 4 water injectors), the FDPSO solution was deemed to have superior economics in comparison to a similar tension leg wellhead platform (TLWHP) + FPSO combination. Where the actual breakover point occurs, and tips the scale in favor of another concept, is beyond the scope of this paper. MODU Rig Rates and Availability As was the case with Azurite, market supply and demand forces weighed heavily on the decision to pursue an alternative development strategy, rather than the more conventional FPSO + subsea wells development scheme that is common to West Africa. Back in 2006, a time period following discovery and appraisal when field development alternatives were identified and evaluated, most deepwater semis were fully booked on long term charters. Those that were available came at a premium, with day rates exceeding USD 500,000 per day. The ability to employ a platform-based drilling rig and not be subject to MODU availability or pricing variability drove the Azurite project team towards an alternative solution; either a TLWHP or the FDPSO concept. Fast-forwarding in time to 2010, we note that even with the sustained downturn in crude oil prices, from highs that approached USD 150 per barrel back in 2008, worldwide demand for deepwater semisubmersibles remains high. A cursory view of published rig rates suggests rates will remain in the $400K+ per day rate range for the foreseeable future. Conclusions This paper illustrated some of the project technical and economic drivers that led the Azurite project team to select the FDPSO concept. Looking beyond the specifics of Azurite, this paper also identified some of the key variables that determine May 2011 MECHANICAL ENGINEERING 61

12 suitability of the FDPSO concept for use in field developments. Regardless of application, Azurite has shown the way forward. The possibilities and permutations are many. The step change in economics afforded by the incorporation of a drilling rig onboard a conventional FPSO brings new hope to fields of similar geometry and in similar environments that heretofore were considered marginally economic or uneconomic. The FDPSO concept also has application as an early production system, in advance of full field developments. Drilling and production can commence, generating revenue while at the same time generating valuable data regarding reservoir performance. The FDPSO can also be an integral component of phased development schemes. Thus the FDPSO has proven to be a robust concept that can add significant value both in terms of reduced cost and information gained on reservoir performance information that permits further field development optimization. Against the backdrop of today s lean economic times, and as the number of large discoveries in deepwater shrink and the industry seeks new ways to monetize stranded pockets of oil and gas, the concept will no doubt receive much more scrutiny. References [1] Howard, Hampshire, Moore, White, and Bayne. First-Ever FDPSO at Work on Azurite Field Development, November 2009, Offshore, PennWell [2] Simmons, Matthew R. The World s Giant Oilfields: How Many Exist? How Much do They Produce? How Fast are They Declining?, January 2002, M. King Hubbert Center for Petroleum Supply Studies [3] Lavingia, Nick J. Managing Risk for Global Energy Projects, 2005 AACE International Transactions Doreen Chin, Ph.D. named ASME Fellow in 2011 For more information and a profile of Dr. Chin, visit our website: The Ocean, Offshore and Arctic Engineering (OOAE) Division The Ocean, Offshore and Arctic Engineering Division features a wide range of social and technical issues, like environmental protection, education, HSE, energy supplies, environmental loading, hydrodynamic behavior, arctic engineering, materials selection, and structural strength. Besides all oil & gas related topics which still play an important role, nowadays, ocean renewable energies, like waves, tides, currents and offshore wind, have provided new and interesting ideas for scientists and engineers. The main activity of the OOAE Division is the annual International Conference on Ocean, Offshore and Arctic Engineering (OMAE). With a record number of more than 850 papers reviewed, the OMAE 2011 Conference in Rotterdam (June 20-24, 2011) will be an ideal forum for offshore engineers, researchers, managers and students to present their progress in research and innovative technology. The OMAE is considered to be the ideal mix of people from industry and academia. The registration for this important conference is now open at OMAE2011 has been organized by KIVI NIRIA (Royal Institute of Engineers) and a unique team of volunteers from the Dutch offshore and shipbuilding industry. Bas Buchner, Chairman of the OMAE2011 conference, says, The unique thing about this OMAE conference is that it has been developed by a team of 25 young engineers, besides the normal Local Organizing Committee. They have organized special events and given the conference a special flavor. This coopera- 62 MECHANICAL ENGINEERING May 2011

13 tion has not only made the conference itself a terrific event, but it has also created cooperation in this field and stimulated young engineers to be involved in research and innovation in the future. Finally, we re making it more fun! The conference is a special product of the broad offshore industry in the Netherlands with contributions from Allseas, Biglift, Bluewater, Bosch Rexroth, Boskalis, Dockwise, GustoMSC, Heerema Marine Contractors, Huisman Equipment, IHC Merwede, KeppelVerolme, MARIN, Shell, Smit, The Offshore Partners and TU Delft. This resulted in a special OMAE2011 conference with the following highlights: Interesting technical Opening Session under the title Going Deep! on the challenges of new activities offshore: Floating wind (Wim de Boom, GustoMSC), Deep water salvage (Bert van der Velden, Smit Salvage) and Deepsea mining (Jan Willem van Bloois, IHC Dredgers) Besides the ten regular Symposia on all topics relevant in Offshore engineering, there are three special Symposia for Dutch researchers who gave important contributions to offshore research: Jan Vugts, Jo Pinkster and Johan Wichers The Rotterdam Offshore Boat tour on Tuesday and the special Banquet in the Maritime Museum on Wednesday. An interesting partner program and two technical tours on Friday to IHC shipyards, the windmills of Kinderdijk (world heritage), the Delta works and MARIN All information on the conference can be found at Join us in Rotterdam this June for a fantastic experience. OOAE also heavily supported the new Arctic Technology Conference (ATC) which was held for the first time in February 2011 in Houston. This conference brought together Arctic researchers, engineers and operators. 130 reviewed papers were presented to more than 1,300 attendees, with more than 50 exhibitors in the exposition hall. The great success of our first ATC means for you to be on the lookout for the 2nd ATC conference in the near future! Dr. Walter L. Kuehnlein Chair, OOAE Division The Pipeline Systems Division The Pipeline Systems Division (PSD) was elevated to full division status in 2003 and is part of ASME's International Petroleum Technology Institute (IPTI). Through the hard work of founding membership, PSD has established a strong foundation and continues to promote a community of practice for pipeline engineers. One of the cornerstones for PSD is the International Pipeline Conference (IPC) that has been held biennially in Calgary, Alberta (Canada) since 1996 and has become a premier event. While PSD is very active in the planning of IPC, establishing top-level technical tracks and a peer-review process for the technical papers has made this event a huge success. A goal of PSD is to provide a forum to promote professional development around the world and this is accomplished on many fronts. PSD is actively supporting the development of pipeline conferences in India and China and has continued to support the well established Rio Pipeline Conference. While local committees organize the events, PSD supports professional development activities and the technical tracks within these conferences. The growing success of these conferences demonstrates the global interest in pipeline engineering and the need for credible forums to promote professional development, technology exchange, and networking opportunities. PSD has a suite of professional development workshops focused on various aspects of pipeline engineering. This has been a huge success due to the well-recognized and experienced instructors that have identified the needs of the pipeline community. PSD plans to build on these training programs and envisions using these training programs to establish a competency assessment and certification process for pipeline engineering. In order to keep with the times, PSD is also in the early stages of developing a Wikipedia for Pipelines. This forum will provide the opportunity for pipeline engineers to expand networking opportunities and to interact with colleagues on many technical topics. Like all volunteer organizations, we are always recruiting volunteers and looking for ideas that will continue to build on the PSD network. So, if you have any interest in supporting PSD, please send an to ipti@asme.org or go to and update your ASME Membership Profile by logging into your account, selecting Update Professional Profile, and then Select Pipeline Systems Division as your Techni- May 2011 MECHANICAL ENGINEERING 63

14 cal Division/Interest. This will ensure that you are aware of PSD activities. On behalf of the PIPELINE SYSTEMS DIVISION Executive Committee, we hope that you are able to capitalize on any beneficial aspects produced by this division as part of your activities in the pipeline community. Very truly, Patrick H. Vieth, Chair, Pipeline Systems Division Some useful links: ASME Pipeline Systems Division (PSD) International Pipeline Conference (Calgary, AB) Rio Pipeline Conference India Oil & Gas Pipeline Conference ASME-IPTI SHORT COURSES GLOBALLY AVAILABLE Get the best training available with ASME- IPTIʼs career building short courses taught by world-renowned experts. Topics include the latest technologies in the petroleum, pipeline, ocean, offshore and arctic engineering fields. Engineering Ethics in Action March 16, 2011 ONLINE WEBINAR May 26, 2011 ONLINE WEBINAR Sept. 28, 2011 Houston, TX (Classroom) Nov. 3, 2011 ONLINE WEBINAR Dec. 7, 2011 Houston, TX (Classroom) Flow Assurance Oct. 18, 2011 Houston, TX IOPF 2011 Fundamentals of Deepwater Project Development March 28, 2011 London, UK Deepwater Development 2011 June 19, 2011 Rotterdam, The Netherlands OMAE 2011 October 17, 2011 Houston, TX IOPF 2011 Fundamentals of Deepwater Riser Engineering March 31, 2011 London, UK Deepwater Development 2011 June 19, 2011 Rotterdam, The Netherlands OMAE 2011 October 18, 2011 Houston, TX IOPF 2011 Fundamentals of Dynamic Positioning June 19, 2011 Rotterdam, The Netherlands OMAE 2011 Fundamentals of Model Testing June 18, 2011 Rotterdam, The Netherlands OMAE 2011 Ice Engineering June 18, 2011 Rotterdam, The Netherlands OMAE 2011 Pipeline Engineering: Design, Construction & Assessment March 7-8, 2011 Tulsa, OK August 22-23, 2011 Calgary, AB, Canada Pipeline Engineering: Design & Construction Sept. 19, 2011 Rio, Brazil Rio Pipeline Conference Pipeline Engineering: In-Line Inspection March 10, 2011 Tulsa, OK August 25, 2011 Calgary, AB, Canada Pipeline Engineering: Integrity Management March 9, 2011 Tulsa, OK August 24, 2011 Calgary, AB Canada Sept. 19, 2011 Rio, Brazil Rio Pipeline Conference Pipeline Engineering: Operation & Maintenance Sept. 19, 2011 Rio, Brazil Rio Pipeline Conference Subsea Pipeline Design Overview Oct. 17, 2011 Houston, TX IOPF 2011 In addition to the public courses offered above, classes can be customized to meet your company's needs. For additional course information and registration, visit our website at Questions? Contact Melanie Diaz: ASME-IPTI Katy Freeway, Suite 865 Houston, TX (Courses and dates are subject to change) 64 MECHANICAL ENGINEERING May 2011