Marathon Oil Co.’s Camden Hills field in the ultra-deepwater of the Gulf of Mexico has begun producing natural gas at a rate of 50 MMcf/d from the first two fields, and is expected to reach peak production of 100 MMcf/d later this month. The production is flowing from a new world-record water depth of 7,209 feet.

The Camden Hills development, located in Mississippi Canyon Block 348 and approximately 150 miles southeast of New Orleans, is the deepest field in the recently completed Canyon Express gas gathering system. The system links the Camden Hills, Aconcagua and Kings Peak fields. Marathon owns a 50% working interest in Camden Hills and serves as operator. Pioneer Natural Resources holds 33.3% interest, and TotalFinaElf E&P USA Inc. has a 16.67% interest.

In June, Arlington, VA-based investment bank Friedman, Billings, Ramsey & Co. (FBR) analyzed new deepwater Gulf of Mexico projects scheduled to ramp up between 2002 through 2005 (see NGI, June 10). It estimated at the time that Camden Hills had reserves of 83 million boe, and would reach a peak production of 50 MMcf/d, half of what Marathon now expects to produce.

“Camden Hills is an outstanding technological achievement that sets a new industry benchmark for oil and gas development in ultra-deepwater,” said Dave Golder, Marathon’s senior vice president of Commercialization and Development. He said on Wednesday that the “knowledge and experience…gained from Camden Hills will prove valuable as we continue to pursue Marathon’s deepwater exploration and development strategy in the Gulf of Mexico, West Africa and Nova Scotia.”

Camden Hills consists of two subsea wells with flow lines and control systems that are connected to Canyon Express. Each well is equipped with a wet gas flow meter, which allows the amount of gas and liquid production to be monitored constantly. Both wells were completed with two gravel-packed intervals and an intelligent-well completion system that allows either interval to be produced independently or commingled to maximize reserve recovery, said Marathon.

First discovered in 1999, Camden Hills’ development was sanctioned as part of the Canyon Express gas gathering system. Canyon Express terminates at the Williams-operated Canyon Station platform in Main Pass, where all Canyon Express production is processed and then shipped through export lines to the domestic market.

TotalFinaElf and BP are operators of the Aconcagua and Kings Peak fields, respectively, and TotalFinaElf operates the Canyon Express gas gathering system. FBR estimated in June that Aconcagua contained 50 million boe of reserves, with a peak of 250 MMcf/d, and King’s Peak was estimated to hold 17 million boe, with a peak rate of 200 MMcf/d.

Canyon Station was completed in July, and is able to receive up to 500 MMcf/d from the 10 subsea wells at Camden Hills, Kings Peak and Aconcagua (see NGI, July 15). Feeder lines were completed in September, and Williams said the system would reach 300 MMcf/d by the end of October, and full capacity by year’s end.

“The Canyon Express system marks a new era of inter-company collaboration in the development of ultra-deepwater fields that individually might not be commercially viable,” said Golder. He noted that the system’s participants agreed to share technical resources, design and infrastructure capabilities.

Marathon acknowledged that its employees and contractors had made the system successful to date. Its many contractors included Cameron, Cheyenne Services Inc. Kvaener Oilfield Products, NOVA Technology, Oceaneering International, Schlumberger, SonSub Inc., Transocean Offshore Deepwater Drilling, and WellDynamics, which Marathon said “were key to this world-record success.”

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