Deepwater drilling challenges Benjamin choo Gm, Drilling – murphy malaysia

1. Deepwater drilling challenges Benjaminchoo Gm, Drilling – murphymalaysia

2. 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.

3. Offshore Sabah Water Depths Kinabalu Field: 55m Deepwater Block K: 1,320m Petronas Towers: 452m

4. 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.

5. 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).

6. 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.

7. 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.

8. 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.

9. 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.

10. Deepwater Emergency Response • Emergency well control and blowout response plan need to be developed. • Emergency responsebased on ICS structure. • Access to subsea well containment package. • Subsea capping stack. • Subsea dispersant system and dispersants. • Debris removal. • Ability to drill relief well.

11. 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.

12. 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 GumusutKakap deepwater field. • First oil achieved from Siakap North Petai deepwater project in Feb 2014. Ocean Rover SKD Menang, Kikeh DTU and Kikeh FPSO

13. Deepwater Drilling Performance – Murphy Malaysia vs Global Murphy

14. QUESTIONS?