The Minerals Management Service, a US federal agency, has prepared an environmental assessment on operations in the deepwater areas of the Gulf of Mexico Outer Continental Shelf. An integral part of this assessment involves DNV’s risk-analysis work, which forms part of an environmental impact statement on the possible use of floating production, storage and offloading (FPSO) units.
Over the past few years, there has been a surge in deepwater exploration and drilling activities in the GoM. The sector has evolved rapidly, seeing frequent new projects and developments. Says Oynes, Despite the previously low oil prices, we have had very substantial levels of exploratory drilling over the past couple of years. The reason for that is probably that companies have long-term, pre-committed contracts. There have been some 1,900 exploratory and development wells drilled to date in the deepwater areas of the GoM. Thats a lot of drilling; probably one of the untold stories is that as it has proceeded, the geology has revealed new frontier areas, particularly in ultra deepwaters.
Planning ahead for FPSOs
The MMSs experience of FPSO-type vessels is limited to a single application in the Pacific Outer Continental Shelf Region. According to Oynes, no operator has proposed an FPSO as a development strategy for the GoM to date, although several have indicated that they are close to making a formal submission. Says Oynes, Since we have not had an application for an FPSO formally presented to us, we have not had a concrete opportunity to work through what the specific issues might be on an FPSO, nor the issues for a particular site. Essentially, what we have today is our anticipation of the fact that we are going to get an application; the question is how do we get our regulatory house in order so that we can deal with that application.
From an environmental perspective, there are specific issues and potential impacts related to FPSOs, as well as some broader concerns. Consequently, we decided that the proper path was to conduct an environmental impact statement (EIS). This is particularly important as it helps to address the broader and generic types of questions that will often be raised, since it would involve the first FPSO-based development project on the GoM OCS.
DNV is part of the team chosen by the MMS to prepare the EIS. DNV conducted the risk-analysis portion of the EIS. The study assesses the environmental effects of FPSOs by examining a hypothetical 1 million barrel storage FPSO, with tankers periodically offloading produced oil. A high-case scenario with a 2.3 million barrel storage unit has also been studied. The MMS will manage the contract and retain overall responsibility for compliance with the National Environmental Policy Act, which is the U.S. law regulating environmental issues.
The regulatory approach
Regarding regulatory issues, the MMS has had to adapt some areas of the regulatory programme and responsibilities to address the different issues and concerns related to FPSOs. Explains Oynes, While weve had a lot of discussion in many different forums on the regulatory front, we havent seen a crystallised focus yet; now we are at a point where that is rapidly taking shape. During the next couple of months, we expect to start talking much more about the important issues that need to come into place. Right now, the regulatory approach continues to evolve, and we are trying to get this on some parallel path, so that in several months time we hope that our regulations and the final EIS will emerge together. Then well be ready for business when some operator files an application.
The MMS is attempting to keep up with technological advances and issues seriously affecting safe, pollution-free exploration and development offshore. According to James Regg, Chief Technical and Operations Support Section, FPSO issues have been discussed with operators, contractors and others for some years, and investigations are continuing into the international efforts focusing on interfaces between the production and non-production processes. Deborah Cranswik, environmental scientist at MMS, also points out that another key issue will be the U.S.Coast Guard role in regulating FPSO operations. It should be possible to identify and co-ordinate the jurisdictional overlaps between the MMS and USCG in order to avoid duplication. The question of whether the FPSOs should be double-hulled, and the applicability of OPA regulations to FPSO operations, are also the subject of discussion.
Projections for 2000
Oil and gas producers in the GoM are projected to drill a total of 994 wells in the year 2000, based upon an evaluation of producers drilling budgets and the relative stability of oil and gas prices. The full application of floating production units is uncertain, but market sources believe it is only a matter of time before FPSOs are working in the Gulf.
Oynes comments, We encourage operators considering the FPSO option for field developments in the GoM to come in and talk with the MMS early. However, we are concerned about the move towards fast-track development to reduce cycle time and bring forward the date of first oil, particularly in relation to the quality and safety of the systems developed for production on the OCS.
Operators need to understand that there are environmental reviews and regulatory requirements that cannot be compromised as part of the fast-tracking effort. It will continue to be the operators responsibility to demonstrate to us that the FPSO can operate in the Gulf of Mexico in a safe and pollution-free manner.