MORGAN CITY — Though the moratorium on deepwater drilling in the Gulf of Mexico has been lifted and permits are slowly being issued for new projects, perception of the opportunities in the Gulf remains highly altered from pre-Deepwater Horizon blowout conditions.
With the blowout and moratorium, the petroleum industry “faced political risk for the first time in the United States,” Robert Shivers III, vice president of projects for ATP Oil and Gas Corp., told members of the Atchafalaya Chapter of the American Petroleum Institute Tuesday night.
ATP is taking a wait-and-see approach to further exploration in the Gulf of Mexico, Shivers said, though the company does have plans to expand production in blocks it already licenses in several fields in the Gulf.
“We’re not going to come back just because there’s an election,” Shivers, a Patterson native, said. “It’s hard to recover confidence that has been damaged.”
The company is currently concentrating on overseas opportunities, including its Cheviot hub in the North Sea near the Shetland Islands, north of Scotland and west of Norway. The site is believed to have 50 million barrels of oil in reserve in about 500 feet of water.
The Cheviot hub produced briefly in the late 1990s, Shivers said, but production there was too expensive with oil priced at $20 per barrel or below at the time. “With Brent crude at $100 a barrel, $110 a barrel, development makes more sense.”
The company has also received licenses to develop Israeli gas reserves in the Mediterranean Sea. The waters there are 4,000 to 5,000 feet deep, but that’s not the biggest obstacle.
The Israeli gas market is saturated, so profiting from the field will entail moving the gas to European markets for resale. The Israeli government will not allow a plant to liquefy the natural gas for transport to be built along the country’s populous coast, and a pipeline through a neighboring Arab country is not feasible.
ATP’s answer is a floating platform and semisubmersible tanker that will help move the gas to Europe, where gas is selling for $10; and Japan, where gas is selling for $15.
Though the company is focusing more on overseas projects, it still has valuable properties off the Louisiana coast. Its Gomez hub has been producing since 1975, Shivers said, and continues to be a profitable site.
The company developed its Titan hub at Ingleside, Texas, making it the first hub to be fabricated in the United States, Shivers said. It was designed to withstand winds up to 132 miles per hour and waves up to 92 feet.
Titan, almost 700 feet tall, was placed on site in April 2010, shortly before the Deepwater Horizon blowout, stalling production until a new permit could be secured, well into 2011.
Among the features of the Titan is a redundant blowout preventer, which is not required under current standards. The federal Bureau of Ocean Energy Management “gave us a citation for that, but that didn’t get us a permit,” Shivers said.
Because a design like Titan would “bump the sea floor” in the Cheviot field, Shivers said, the company decided to use a design called Octobuoy for the North Sea project. The apparatus is shorter but wider, with four massive piers on an eight-sided base.