Subsea Operation Expenditures (Opex)
An offshore well’s life includes five stages: planning, drilling, completion, production, and abandonment. The production stage is the most important stage because when oil and gas are being produced, revenues are being generated. Normally a well’s production life is about 5 to 20 years. During these years, both the planned operations and maintenance (O&M) expenditures and the unplanned O&M expenditures are needed to calculate life cycle costs. OPEX includes the operating costs to perform “planned” recompletions. OPEX for these planned recompletions is the intervention rig spread cost multiplied by the estimated recompletion time for each recompletion. The number and timing of planned recompletions are uniquely dependent on the site-specific reservoir characteristics and the operator’s field development plan. Each of the identified intervention procedures is broken into steps. The duration of each step is estimated from the historical data. The nondiscounted OPEX associated with a recompletion is estimated as: OPEX =(Intervention duration) x (Rig spread cost) The percentage of each cost component of the total OPEX varies from company to company and location to location. Cost distributions among OPEX components for shallow-water development are similar to those for deepwater developments, except that the cost of product transportation is significantly lower.
References
[1] AACE International Recommended Practice, Cost Estimation Classification System, AACE, 1997, NO. 17R-97.
[2] Douglas-Westwood, The Global Offshore Report, 2008.
[3] C. Scott, Investment Cost and Oil Price Dynamics, IHS, Strategic Track, 2006.
[4] U.K. Subsea, Kikeh – Malaysia’s First Deepwater Development, Subsea Asia, 2008.
[5] Deep Trend Incorporation, Projects, http://www.deeptrend.com/projects-harrier.htm, 2010.
[6] American Petroleum Institute, Specification for Subsea Wellhead and Christmas Tree Equipment, first ed., API Specification 17D, 1992.
[7] American Petroleum Institute, Specification for Wellhead and Christmas Tree Equipment, nineteenth ed., API Specification 6A, 2004.
[8] FMC Technologies, Manifolds & Sleds, FMC Brochures, 2010.
[9] Mineral Management Service, Life Time Cost of Subsea Production Cost JIP, MMS Subsea JIP Report, 2000.
[10] R. Goldsmith, R. Eriksen, M. Childs, B. Saucier, F.J. Deegan, Life Cycle Cost of Deepwater Production Systems, OTC 12941, Offshore Technology Conference, Houston, 2001.
