Presented at the 2015 Deepwater Technical Symposium, Hubie Fix highlights the top 10 factors that could affect the future of subsea production.

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10 Factors that May Affect the Future of
Subsea Production
2015 Deepwater Technical Symposium
Hubie Fix, Subsea Systems Engineer

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According to Douglas Westwood’s latest estimates, Subsea hardware spending in 2014-18 is forecast
to nearly double the size of installed subsea infrastructure.
• Established Deepwater regions in Brazil, West Africa and the US Gulf of Mexico
• Newly discovered offshore gas provinces in East Africa and the Eastern Mediterranean
• >1000m Water Depths
• Provide additional markets which will lead to positively impacting IRM (Inspection, Repair &
Maintenance) expenditure
• Subsea hardware capex expected to total US$117 billion between 2014 and 2018 (80% growth).
1. Subsea Hardware Spending and Production
Depth Expected to Increase

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With the growing infrastructure and subsea pipeline network, ROVs (Remotely Operated Vehicles) are
expected to gain market share over the coming five-year period.
• ROV Inspections
• Replacement Tasks
• Cutting Operations
• Cleaning Operations
• Hatch Operations on Subsea Structures and Valves
• Subsea Equipment Troubleshooting
1. Subsea Hardware Spending and Production
Depth Expected to Increase

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AUVs (Autonomous Underwater Vehicles) are also expected to gain market share over the coming five-
year period.
Life-of-Field Inspection Surveys are currently in the early stages of commercial development with an
expected increase in demand for the future.
1. Subsea Hardware Spending and Production
Depth Expected to Increase
• High-Resolution, High-Speed
Seafloor Surveys & Mapping
• Geophysical Site Inspections
• Pipeline Route Planning
• Pipeline & Subsea Structure
Inspection
• Hydrography

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2. Baby Boomer Generation Retirement
Roughly 50% of the working population in the oil & gas industry will be eligible for
retirement in 2015. (Current average retirement age is 62)
• Employee Training Committees
• Subsea Operational Standards & Knowledge Retention

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Employee succession planning to mitigate work force & knowledge loss.
2. Baby Boomer Generation Retirement

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3. Subsea Condition-Based Maintenance & Monitoring
Maximize Asset Availability & Subsea Production
Rig
Uptime
Safety
Environment
Regulatory
Compliance
Equipment
Life Cycle

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3. Subsea Condition-Based Maintenance & Monitoring
Condition Performance Monitoring
• Data Trending & Downtime Mitigation
• Asset Integrity Dashboards
• Equipment Alerts & Problem Diagnosis

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4. IADC Well Control Accrediting
Comprehensive
Well Control
Culture
Fundamental &
Supervisory
Levels
Team Problem
Solving &
Decision Making
IADC STANDARDIZED WELL CONTROL ACCREDITATION

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5. The Environment
The U.S. Oil and Gas sector ranked second in emissions to power plants,
releasing 225 million metric tons of carbon dioxide equivalent in 2011.
More than a third of that came from methane, the main constituent of natural
gas, and a far more potent global warming gas than carbon dioxide.

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5. The Environment
The U.S. Environmental Protection Agency Clean Power Plan to issue final
Greenhouse Gas Emissions in August 2015.
GOAL
•Cut carbon emissions from the power sector by 30% from 2005
levels.
METHODS
•New rules on greenhouse gas emissions
•Final regulations on the gas and oil sectors estimated to be
released 2016
IMPACT
•Increased spending for underground pipelines for Clean CO2
Power Plants
•Possible increased demand for alternative energy and fuel
additives (ethanol)

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5. The Environment
Shutdown of Thermohaline Circulation
• Deepwater Temperatures, Densities and Salinity

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5. The Environment
Shutdown of Thermohaline Circulation
• 2014-2015 shows extraordinary record cold pool of water south of
Greenland
• Risk for generating significant disruptions to atmospheric winds and
related weather.

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6. Offshore vs. Shale Production
• Over the last 10 years, offshore investments have increased from ~ US$150 billion
in 2005 to ~ US$360 billion in 2014
• With the help of horizontal hydraulic fracturing becoming proven and economical.
Shale investments increased from almost zero to ~ US$160 billion in 2014.

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6. Offshore vs. Shale Production
• While incurring increasingly more costs throughout the period, offshore production
remained largely unchanged at 27 MMboe/d
• Shale production, on the other hand, showed robust growth, increasing from less
than 100 kboe/d in 2006, to an estimated ~7.5 MMboe/d in 2015. The reactiveness
of the production to the investments is largely a factor of the life cycle.

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6. Offshore vs. Shale Production
• Over the last five years, shale has experienced extraordinary development,
delivering much higher production growth than offshore.
• Reduced activity the quickest when prices dropped but will also be the fastest to
recover once oil prices increase.

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7. Methane Hydrates
• “Fire Ice”
• Natural Gas
• Harsh Environments
• Technical Challenges
• Production Growth

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7. Methane Hydrates
• The Fukushima Incident of March 11, 2011 led to Japan’s entire nuclear industry to be shut
down, resulting in Japan’s gradual shift back to fossil fuels for power generation.
• Without nuclear energy, Japan’s domestic energy resources could only meet less than 9
percent of the nation’s energy requirement.
• On an annual basis, LNG imports cost the country nearly $700 billion.

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7. Methane Hydrates
• In March 2013, by lowering a methane hydrate reservoir’s pressure, a Japanese
drilling ship of the Japan Oil, Gas & Metals National Corporation (JOGMEC)
successfully extracted methane hydrates from the seabed off Central Japan
(Nankai Trough).
• During 6 days it produced 120,000 cubic meters in total, i.e. 20,000 cubic meters a
day of natural gas.
• Estimates indicate that the reserves of methane hydrate correspond to a 100-year
supply of natural gas for Japan, making it an important potential source of energy.

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8. Unmanned Platforms
• Maersk Oil’s unmanned platform Tyra Southeast-B finished
construction mid-2014 and started production March 2015.
• Current production
2600boepd
• Planned to drill 8-12
horizontal wells
• Total delivery
– 20 million barrels of oil
– 70 billion standard
cubic feet of gas.
• Combined reserves and
resources of 50 MMboepd

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9. Offshore Regulations
ISO 55000: International Standard for Asset Management (January 2014)
• Overview of Asset Management
• Principles and Terminology
• Expected Benefits
Ten Things to Know about ISO 55000 – the International Standard for Asset
Management
• By Mike Poland, CMRP, Life Cycle Engineering
Extending the public comment period on the Notice of Proposed Rulemaking for “Oil
and Gas and Sulphur Operations on the Outer Continental Shelf – Blowout Preventer
Systems and Well Control,” which was published in the Federal Register on April 17,
2015 (80 FR 21504)
• Proposed rule would focus, at this time, on blowout preventer requirements,
including incorporation of industry standards and revision of existing regulations.
• Reforms in the areas of well design, well control, casing, cementing, real-time
well monitoring, and subsea containment.
• Arctic-specific standards for oil and gas drilling in the remote region.
• Draft leasing plan, pencils in one possible sale of mid- and south Atlantic acreage
but rules out auctions in the Pacific Ocean and in eastern Gulf waters.

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10. Iran Oil & Gas Sanctions Lifted
• Iran hasn't been able to sell oil to the United
States since 1995. Most major Western
countries imposed sanctions within the last
five years aimed at curbing Iran's nuclear
program.
• On July 14, 2015 Iran and a group of six
nations led by the United States reached an
agreement limiting Tehran’s nuclear ability for
more than a decade in return for lifting
international oil and financial sanctions.
• Iran could add as much as 500,000 barrels of
oil per day to worldwide markets by the end
of this year.
• Once we get past Labor Day, we should see
gas falling by 10 to 15 cents a month," said
Tom Kloza, chief oil analyst with the Oil Price
Information Service. "By December a lot of
places are going to see gasoline at $2 or
less."

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References
1. Loffman, Matt. “Subsea infrastructure – growing and moving deeper” (2015, January 1). Retrieved from
http://www.oedigital.com/regions/item/7876-subsea-infrastructure-growing-and-moving-deeper
2. Riffkin, Rebecca. “Average U.S. Retirement Age Rises to 62” (2014, April 28). Retrieved from
http://www.gallup.com/poll/168707/average-retirement-age-rises.aspx
3. Cheney, Paul. “Oilpro.com: Oil & Gas Social Network Launched to Bridge Industry Generation Gap” (2013, October 7). Retrieved from
http://www.bizzuka.com/company-blog/oilprocom-oil--gas-social-network-launched-to-bridge-industry-generation-gap
4. Anderson & Rasmussen “Condition and Performance Monitoring of Subsea Production Systems” Retrieved from
http://www.spe.org/jpt/article/5190-young-technology-showcase-14/
5. Retrieved from http://www.iadc.org/wellcap/
6. Retrieved from http://www.iadc.org/wp-content/uploads/2015/06/2014-ISP-Reporting-Guidelines.pdf
7. Walton, Robert. “EPA signals final Clean Power Plan rule due in August” (2015, May 27) Retrieved from
http://www.utilitydive.com/news/epa-signals-final-clean-power-plan-rule-due-in-august/399793/
8. Retrieved from https://robertscribbler.wordpress.com/2015/03/23/world-ocean-heartbeat-fading-nasty-signs-north-atlantic-thermohaline-
circulation-is-weakening/
9. Nysveen, Per Magnus and Wei, Leslie “Offshore vs. Shale, which will prevail long-term“ (2015, April 9) Retrieved from
http://www.ogfj.com/articles/print/volume-12/issue-4/features/offshore-vs-shale.html
10. Retrieved from http://oilprice.com/Energy/Natural-Gas/Methane-Hydrates-Larger-Energy-Opportunity-Than-Shale.html
11. Retrieved from http://www.jogmec.go.jp/english/oil/technology_015.html
12. Retrieved from http://www.maerskoil.com/media/newsroom/pages/firstproductionfromnewplatforminthedanishnorthsea.aspx
13. Isidore, Chris. “$2 gas will be back after Iran nuclear deal” (2015, July 14). Retrieved from
http://money.cnn.com/2015/07/14/news/economy/2-gas-iran-nuclear-deal/

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Questions & Contact
Hubie Fix
Subsea Systems Engineer
company website: www.LCE.com
e-mail: hfix@LCE.com
linkedin: https://www.linkedin.com/in/hubiefix