The oil industry has steadily moved deeper and deeper offshore to tap oil reserves in harder to reach places. This trend is a function of depleting reserves of easy oil, but it is only possible because of radical advancements in deepwater drilling.
But as oil companies move to more remote places, they are increasingly turning to subsea production systems rather than conventional platform drilling. Subsea production involves the installation of equipment at the bottom of the ocean, on the seafloor. Several systems can be installed near each other, and are installed on top of completed wells. They monitor and control the production of oil, pumping it to a central line – or riser – which is then sent back up to a ship or platform at the surface of the sea. Due to the array of lines tying to each other, these systems are often called “trees” or “subsea trees.”
Subsea production has been around for decades, but the problem until recently has been their cost and their inability to extract oil as efficiently as conventional platform drilling. However, designs have improved in recent years that have increased productivity.
Subsea production systems have progressed to the point where they can boost the overall production of deepwater fields over conventional drilling. For example, Statoil (NYSE: STO) is deploying a subsea system at its Tordis field in the North Sea. The tree it is using will allow it to increase its recovery factor…