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Deepwater Neptune Platform Begins Oil, Gas Production

After a delay of more than six months due to "structural anomalies" in the hull's pontoons, BHP Billiton said early last week that oil and natural gas production has finally commenced from the $1.2 billion Neptune development in the deepwater Gulf of Mexico.

The single-column tension leg platform (TLP) is designed to handle up to 50,000 b/d of oil and 50 MMcf/d of natural gas.

The Neptune deepwater project was given a green light for development during the summer of 2005 by partners Marathon Oil (30%), BHP Billiton (35% and operator), Woodside Energy (USA) Inc. (20%) and Maxus (U.S.) Exploration (15%) (see NGI, July 4, 2005). The Neptune play, which was discovered in 1995, is located on the Western Atwater Foldbelt in water depths that range from 4,200 feet to 6,500 feet about 120 miles off the coast of Louisiana. The field holds an estimated 100-150 million boe in proved and probable reserves.

In March 2008 the project's backers discovered irregularities in the platform's hull during visual inspections (see NGI, March 31). After a detailed analysis by the engineering contractor that designed and built the hull, it was determined that part of the support structure inside the pontoons required additional reinforcement, which pushed the expected start-up into the second quarter of 2008 (see NGI, May 12).

"The start-up of the Neptune project after several years of drilling, construction, and with the recent remediation work, is a significant accomplishment for BHP Billiton," said BHP Billiton Petroleum CEO J. Michael Yeager. Neptune is the first stand-alone deepwater production platform in the Gulf of Mexico operated by BHP Billiton.

"BHP Billiton has made significant investments in multiple projects in the deepwater Gulf of Mexico. We're now realizing the rewards of that investment with first production late last year from Atlantis and Genghis Khan, now with Neptune, and next year when the BHP Billiton-operated Shenzi development is expected to come on-line," Yeager added.

The Neptune TLP was installed in 4,250 feet (1,300 meters) of water on Green Canyon Block 613. Field development includes six initial subsea wells tied back to the TLP. Further development wells are expected to be drilled after interpretation of new seismic data, which will be obtained in the latter half of 2008.

The Neptune field comprises five blocks: Atwater Valley 573, 574, 575, 617 and 618. Crude oil from Neptune is transported to markets via the Caesar pipeline (in which BHP Billiton has a 25% equity share), while natural gas is exported via the Cleopatra pipeline (where BHP Billiton has a 22% equity share).

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