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Challenges for offshore development in Colombia V Colombia Investment Conference October 2012 Álvaro Racero Baena Caribbean Regional Executive Director.

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Presentation on theme: "Challenges for offshore development in Colombia V Colombia Investment Conference October 2012 Álvaro Racero Baena Caribbean Regional Executive Director."— Presentation transcript:

1 Challenges for offshore development in Colombia V Colombia Investment Conference October 2012
Álvaro Racero Baena Caribbean Regional Executive Director

2 Worldwide Offshore activity
Repsol offshore activity Offshore Colombia Challenges Summary

3 Growth in offshore projects:
Onshore and Offshore Projects Production Start Dates Source: IHS CERA, Capital Costs Analysis Forum–Upstream Houston, May 2012

4 Worldwide offshore production
Deepwater continues to be an important oil supply in the world (not only in US) and will continue to increase in the future. The contribution from deepwater fields rises from around 5.4 Mbd in 2011 to 11.2 Mbd in Source: IHS CERA * Deepwater >1000 <5000 feet; Ultradeep Water: >5000 feet.

5 Rigs Availability Major offshore drilling basins (rig supply/utilization) Source: ODS-Petrodata, Morgan Stanley Research, October 2012

6 Repsol: Offshore presence around the world
Offshore activity in 20 countries (operator in 14) Norway Canada Ireland * Bulgaria Spain USA Portugal Venezuela Tunusia Morocco Trinidad and Tobago Cuba Guyana Sierra Leone Colombia Liberia Indonesia Angola Australia Brazil * Namibia September, 30th 2012 Deepwater OPERATOR and joint venture Exploration Productión NON OPERATOR Services Contract in production operations * Pending of official ratification

7 Offshore Exploratory and Appraisal Wells
Repsol: Offshore Exploratory and Appraisal Wells : 52 Offshore exploratory (Operator & joint venture in 22) 32 deepwater (Operator & joint venture in 10) Deepwater non operated (dw) Deepwater operated & joint venture & (dw)

8 Repsol: Deepwater Operated Exploratory Wells

9 Repsol: acreage in Colombia
Repsol has 10 blocks in Colombia, 3 in the offshore (Tayrona, RC-11 and RC-12)


11 Ubicación y Concepto de Desarrollo – Fase 300
Proyecto Cardón IV Ubicación y Concepto de Desarrollo – Fase 300 Cardon IV East Block Perla 2ST1 Perla 5 Cardon IV West Block Perla 3x Perla 1X Perla 4x El Campo Perla está localizado aproximadamente 50Km al oeste de la Península de Paraguana (Golfo de Venezuela) en lo que se denomina el Bloque Cardón IV West. Validez de la licencia es de 30 años desde el 2 de Febrero de 2006 PDVSA tiene el derecho de entrar en la asociación hasta con el 35%, hasta 120 días después de declaración de comercialidad Gas Original en Sitio = 17 TCF/ Reservas = 8.1 TCF GSA firmado el Declaración de comercialidad publicada el Plan de desarrollo aprobado el Refineria Amuay Refineria Cardon Perla-2ST1 Perla-1X Perla-4X Perla-5 Perla-3X 14” Tubería del Pozo 14 30” Tubería de Exportación Multifasica Plataforma de Interconexión Perla 1x Estructura liviana Perla 2ST1 Perla 3 5 Pozos Perforados : 4 verticales y 1 sub-horizontal.

12 Challenges for offshore Colombia

13 IHS CERA Upstream Capital Cost Index
Index includes: Steel Land Rigs Offshore Rigs Engineering and Prof. Management Equipment Construction labour Yards Fabrication Sub-sea Bulk materials Offshore installation vessels

14 Cost inflation 2002 Fiat Punto $12, = 2003 Valve (super duplex SS) 2007 BMW 320 2007 $40, = Let’s talk about cost inflation and illustrate it with an example. A nice, but simple, prime quality duplex valve did cost in 2003 about the same than an also nice and simple Fiat Punto. The same nice and simple valve cost today about the same than a nice and sophisticated Audi A6. I know that this is a sad reality for the happy owners of an Audi A6. But, it is also a reality that the same piece of equipment is about 4 times the cost than 5 years ago. 2012 AUDI A6 2012 $48, =

15 Mitigating the Risk of project execution
though a consistent and proved methodology Assuring the appropriate human and technical resources Developing time and cost effective projects that consistently provide added value to the business Predicting project costs and schedule in a reliable way Manage opportunities and project risks during all phases of the project lifecycle. Improve communications establishing a common language

16 Comparación del precio del Gas en diferentes mercados (USD/MMBTU)

17 Offshore Guajira wells
Statistics by spud year, WD, TD Araza-1 ~ 20 years no wells Spud year ~ all the well in shallow water Variable TD Water Depth

18 Kaleidoscope An integrated project to improve the subsurface imaging through seismic processing Leaded by the Repsol subsurface team in Houston

19 Kaleidoscope Applying state-of-the-art algorithms to resolve complex geological geometries Either in sub-salt environment or in complex thrust belts

20 Call for the Geopressure team
Geopressure analysis process Technical maturity Designation Call for the Geopressure team Data preparation Team meeting Budget approval Study completion Study approval PDDP Input: Delivered study (ies). Output: Updated Geopressure model, shallow hazards and geomechanic results, gathered and completed in the PDDP. Participants: Project manager, manager of Operaciones Geológicas, Drilling Manager, Geopressure Team. Description: The Team coordinator and the Drilling Manager validate and approve the study and its conclusions with the support of the recommendations of the Team specialists. The Project manager enters the conclusions and recommendations of the study in the PDDP.

21 Biodiversity, a must to preserve
7 areas of coral-reefs 9 bird sanctuaries including the protected Nariva Swamp Several turtle nesting beaches Cost line geomorphologically complex with 8 zones particularly sensible to oil spills 6 zones of artisan fishing 9 types of sediments, with 4 types of benthonic communities

22 Summary Improve quality of subsurface image and capabilities in Seismic Processing. Improves well prediction. (Kaleidoscope/Phoenix Project) Multidisciplinary geopressure group to improve on the well prognosis for areas with limited well data available Operational Deep-Water capabilities with an offshore drilling group in Houston which give support, supervise and design all offshore drilling operations. IPM and adequate contracting strategies to minimize risks of cost overruns Repsol’s regulatory and drilling groups have been actively engaged with all of the industry initiatives related to the new and evolving regulations in the GOM. Along with 23 other operators in the GOM, Repsol has elected to join the Helix Well Containment Group (HWCG), one of the two groups approved by BOEMRE, to find solutions for spill containment.

23 Thanks

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