California's lawsuit against major oil…
Devastated by the unprecedented Storm…
Baker Hughes has taken efficiency efforts in oil and gas a potentially big step further on the road to even lower production costs. Its DeepFrac technology, officially presented at the Offshore Technology Conference in Houston, promises savings to the tune of US$30-40 million per well, which is about 30-40 percent of the average cost of offshore well drilling.
DeepFrac, says Baker Hughes, also saves a lot of time because it skips some of the steps in the fracking process. Jim Sessions, Baker Hughes vice president for completions, told the Houston Chronicle that recently the company completed a 15-stage fracking project within 11 days, saving the client US$40 million in costs and 25 days in time.
The technology uses so-called ball-activated sleeves that help control the oil flow once the well is drilled, saving on costs for additional pipeline installation and well cementing. What’s more, according to Sessions, DeepFrac enables oilfield operators to frac as many as 20 stages—fracking locations within a single well—in offshore fields, instead of just five.
Tech like this could bring offshore exploration on a more equal footing with shale, highlighting a trend we wrote about earlier this month, of production costs in the two segments increasingly leveling up, with offshore explorers betting more on fewer wells and more subsea tiebacks. Output from such wells is lower but so are production costs, Wood Mackenzie’s upstream oil and gas research director Angus Rodger said in a report.
Jim Sessions admitted that DeepFrac won’t solve all offshore explorers’ problems overnight, but it would certainly help them to lower their costs and enhance drilling efficiency.
Related: BP Triples Q1 Profit, Latest Oil Major To Beat Estimates
A lot of what explorers have so far achieved in deepwater drilling in terms of cost lowering has been thanks to adoption of techniques used by smaller independents forced out of the Gulf of Mexico by the investment intensity environment. Shell, for instance, said it could achieve production costs of US$15 a barrel from its Mars GOM platform thanks to simplifying drilling procedures and optimizing equipment use.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.